This article is based on a panel discussion held at Citi Commercial Bank’s EMEA Digital Leaders Summit 2023 held in Prague in September. Comments have been edited for brevity and clarity.
Rashmi Ghai, Head of Sustainability & ESG at Citi Commercial Bank, talks to three digital companies that are leveraging technology to improve the environment and people’s lives.
While technologies such as solar power and electric vehicles are clearly critical to reducing carbon emissions, there are many other less obvious ways that digital technology can address ESG challenges. A myriad of purpose-led companies has sprung up to develop solutions that can have a real impact on some of the world’s greatest problems.
“The digital and technology sector has a unique opportunity to accelerate the transition to a sustainable and equitable future.” Explains Rashmi, Head of ESG at Citi Commercial Bank. Some examples of these technology-based solutions like carbon emissions foot printing, carbon emissions accounting & reporting, supply chain technology, and Fin Tech platforms focusing on financial inclusion were discussed by her with three Citi Commercial Bank digital clients.
Why clarity is critical
One of the challenges for purpose-led companies trying to deliver an environmental or social impact is quantifying the scale of the problem they seek to solve. They need to identify, or source, relevant data, and ensure that it is reliable, consistent and verifiable.
The seafood sector highlights the scale of the challenge. The global market is worth $1.8 trillion a year and is relied on by two thirds of the world’s population as a primary source of protein or for income. Yet the seafood supply chain is notoriously opaque and inefficient: waste can reach 45% in emerging markets and even in developed countries, it is as much as 25%. As many as one in four seafood items is mislabelled or misdated.
Seafood Souq, a digital platform with a whole of industry approach for the global seafood market. They have developed the end-to-end digital infrastructure for the supply chain, covering trade, traceability, payments and data, and was established to boost quality, protect stocks and improve fishers’ livelihoods. “By sourcing the right data, we can connect buyers with suppliers, eliminate wastage, and bring traceability to the supply chain – which reduces opportunities for fraud,” explains Sean Dennis, CEO & Co-Founder.
Data is also at the heart of Moove, which provides finance to gig workers in the mobility industry in both developed and developing markets. “We do workshops and surveys to understand drivers’ pain points, focused not just on financing but also lifestyle issues such as the cost of living, household dependents and other relevant considerations,” says Tingting Peng, Chief Capital, Strategy and Impact Officer. These insights inform the products and solutions that Moove develops.
The need for action to reduce emissions to slow climate change is gaining momentum and being translated into requirements for companies to act.
“Corporates in Europe – and in the near future, in California – are being asked to produce auditable greenhouse gas emission figures,” says Ellen Moeller, Head of Europe at enterprise climate platform Watershed. “These figures will be the basis for plans to reduce emissions. But for many companies, the task remains ill-defined and cutting through the noise is tough.”
Watershed effectively provides a turnkey solution, enabling corporates to measure carbon emissions, both from their own operations and their supply chain, report them, identify effective actions, and communicate these to the board and to customers.
Making an impact
Identifying and quantifying problems is not enough – purpose-led organisations must also find ways to mitigate them and demonstrate the effectiveness of their solutions.
More than 50% of the gig workers Moove is targeting worldwide have been denied access to financial services, and in regions such as Africa more than 90% of people have never had access to credit. “As gig workers have no employment contracts, they are invisible to traditional financial institutions,” explains Peng.
Moove uses mobility workers’ productivity to underwrite their credit risk, giving them access to credit for the first time, a path to asset ownership and a sustainable income. Moove is also helping to facilitate the move to electrification: 60% of the vehicles it finances are electric vehicles and it invests in charging infrastructure.
As a result of its research into gig workers’ needs, Moove has broadened its range of offerings. For example, it has rolled out health insurance for Uber drivers in sub-Saharan Africa and India that covers dependents, which is a key requirement for drivers, most of whom are male and aged between 25 and 45.
Seafood Souq’s work with both suppliers and buyers has produced impressive results. “We worked with fishers in countries including Oman who caught tuna, and in the absence of an establish cold chain to markets, sold it to local traders for well under market value. Seafood Souq worked with an NGO to train the fishers to use pole and line practices and established a carefully monitored cold chain. As a result, the fishers are now able to secure true market value and consequently catch fewer fish,” says Dennis.
On the buyer side, Seafood Souq works with a well-known hotel in the UAE that sought to source only certified seafood as part of its ESG strategy. “We audited around 400 products it bought and found enormous amounts of fraudulent discrepancies in certifications and mislabelling says Dennis. Seafood Souq built a sustainability dashboard for the hotel group, monitoring product credentials and validating its ESG performance.
There can be a tendency to view ESG as simply a cost, but Moeller at Watershed says it can generate positive returns on investment. “For instance, moving to cloud data centres powered by renewable power improves efficiency and reduces emissions,” she notes. “A robust ESG strategy can also open up access to lower cost sustainable financing.”
In summary, Rashmi from Citi explains how Supply chain technology platforms are scaling up to address seafood traceability and creating a safer and more equitable ecosystem, a mobility Fin tech platform is providing more including financing and access to greener vehicles, and an integrated carbon management platform is helping businesses create impact and accelerate their transition.