Launch Partners

Tuesday, January 31, 2023

Launch Partners

Fintechs in an ESG-focused world

Introduction
DDCAP Group (DDCAP), an industry-leading market intermediary and financial system solutions provider, connects the global Islamic marketplace responsibly via its proprietary system, ETHOS Asset Facilitation Platform (ETHOS AFP). DDCAP aspires to be a best-in-class responsible and sustainable fintech and supports awareness of the business and ethical case for responsible finance. DDCAP is headquartered in London with representative offices in the Dubai International Financial Centre, Manama and Kuala Lumpur, providing a global footprint and connecting into ESG initiatives across the GCC and Southeast Asia.

In tandem with its core offering, DDCAP seeks to invest within Halal economy businesses with exceptional fintech strategies. DDCAP’s leadership believes that Islamic fintech SMEs like itself, and those within the wider Halal economy, have great potential to embed SRI practices across the wider industry and DDCAP sees such investments as a natural complement to its own ESG initiatives and industry goals.

Accordingly, DDCAP works to these same standards itself. Through DDCAP’s Sustainable and Responsible Actions (SRA) Programme, by which ESG considerations are addressed, DDCAP has made the public commitment to develop a more sustainable, equitable and prosperous world and supports the view that those in business must adopt strategies to deliver not only financial results but also social and environmental outcomes. In furtherance of this, DDCAP became a service provider signatory to the UN Principles for Responsible Investment in 2016 and a stakeholder endorser of the UN Principles for Responsible Banking in 2020.

ESG considerations as a fintech
In the last few years, the world has had an awakening to the ESG agenda and, consequently, conversations have become more active and urgent around how businesses can intervene to ameliorate a growing number of issues. Within this dialogue are unique considerations for the potentially energy-intensive businesses of fintechs, as the digital world counts for 3% of global emissions (more than the global aviation industry). Such considerations have been central to building and developing DDCAP’s automated platform, ETHOS AFP, to ensure that ESG principles are embedded across its functionality.

In 2021, DDCAP committed resources from its existing SRA governance structure to build upon its environmental achievements to date and develop a more formalized environmental policy to support both its commercial activities and internal operations. While DDCAP’s progress in this area had already put it ahead of many of its industry peers, DDCAP recognized that focusing on an environmental strategy ahead of any government or regulatory requirements would enable DDCAP to:
• Potentially gain a competitive advantage from its SRA initiative
• Increase engagement with staff and raise its profile with potential new hires
• Preserve and promote its reputation as a ‘first mover’ in its space, and
• Prepare to engage with stakeholders and clients who are asking more questions, more frequently, about the sustainability of their value chains.

As part of this initiative, DDCAP achieved the following:
• Engaging a third-party service provider to assist in measuring its environmental footprint and in setting plans to monitor and reduce this footprint and improve ESG performance generally
• Forming an eco-partnership with a tree-focused charity to provide not only staff volunteering opportunities but also, through its carbon-offset program, the ability to offset its carbon footprint through the development of urban greenspaces in underprivileged areas and improving urban air quality
• Committing to renewable energy where possible. For example, DDCAP’s London office uses only renewable energy and its hosted servers are supported through energy generated 100% from renewable sources, and
• Reviewing the carbon efficiency of the DDCAP Group websites as well as reviewing email etiquette and in-box maintenance policies to reduce preventable emissions.

Conclusion
DDCAP has 25 years of experience championing best practice and as part of its commitments made and achievements hard-won, DDCAP recognizes that it must continue these proactive steps to ensure that it continues its sustainability journey. For emerging fintech companies, they can leverage their own ability to respond to these issues by partnering with appropriately validated ESG-focused initiatives, whose services and actions align with their individual Shariah and responsible practices and can be shared with other participant firms practising within our wider industry to create capacity and scale. Together, existing leaders and new market entrants can support the broader Islamic finance industry to make the transition to a more ESG-focused way of business.

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