Earthbanc has partnered with Swedbank Lithuania to pilot the delivery of carbon and climate reporting for corporate and SME banking customers, which can open the door to sustainable finance opportunities.
While most banks are providing sustainable loans in the form of electric car financing and solar loans, Earthbanc’s flagship product – the Sustainable Finance API – allows for a much deeper data-driven approach, automatically generating sustainable loan opportunities from open banking and Internet of things (IoT) data, with weekly sales leads delivered to the lending unit’s inbox and CRM. This ground-breaking ESG reporting and sustainable loans product allows financial institutions to identify loan opportunities for fleet improvements, building retrofits to make them more energy efficient, cutting costs significantly while also reducing greenhouse gas emissions. We call this “triple-top-line” impact through the Sustainable Finance API, which not only de-risks bank loan portfolios but significantly contributes towards company-wide climate commitments and can reduce costs of capital for sustainable loans. The paid pilot is being run by Rockit Impact Program owned by Swedbank and facilitated by Katalista Ventures, a private equity fund. Earthbanc successfully demonstrated the issuance of a digital green bond on LBChain in 2020, inside the Bank of Lithuania’s Blockchain Fintech Technology Sandbox. According to HSBC report Blockchain, Gateway for Sustainability Linked Bonds, blockchain technology can cut costs 10-fold, making it attractive to all banks exploring the issuance of more sustainability focused bonds. Earthbanc delivers automated ESG disclosures for sustainable bonds and enables the digital issuance of the bond on blockchain as an end-to-end solution, with potential for more than 10-fold cost reduction due to automating the middle- and back-office functions and providing the necessary ESG disclosures. Earthbanc also provides ongoing ESG performance reporting on use of proceeds to ensure positive impacts are measurable and accurate. Antanas Sagatauskas, Head of Corporate Banking Division at Swedbank Lithuania, said: "Swedbank Lithuania has selected Earthbanc's technology to pilot the automation of our business customer's carbon reporting. Participating businesses will be able to see their carbon footprint and gain insights about potential cost savings and carbon reductions that could be generated through implementing sustainability activities. Sustainable finance is becoming the new standard across Europe and Earthbanc's innovative fintech makes this transition easy". Tom Duncan, CEO of Earthbanc, said: “With the EU Sustainable Finance Disclosure Regulation and the European Banking Authority’s Loan Origination Guidelines, requiring financial institutions to report on ESG metrics, banks and businesses are facing challenges with regard o accessing local ESG data to ensure reporting is accurate. Banks need to be more transparent and knowledgeable about climate and ESG risks, and Earthbanc’s technology enables mass adoption of data-driven Sustainable Finance with our APIs and EEA-wide harmonised reporting dashboards.” “Swedbank has been pioneering sustainable investments from the 1960’s and is well positioned to act on climate and ESG risks. This new partnership is a natural evolution for both businesses, accelerating new innovations in reporting and creating new opportunities for businesses to measure their carbon footprint, understand the potential operational cost savings available to them for switching to energy efficient technologies, and unlocking the potential of sustainable finance. This is an exponential market opportunity moment, and the banks and asset managers that seize this moment, will be part of that growth story.” Swedbank has already committed to do more than others in this area. The bank conducts sustainability risk analysis for corporate credits above a certain amount and already excludes companies from their portfolio where coal mining and production represents more than 5% of their turnover. In 2020 Swedbank adopted a new climate-focused strategy to not grant new financing for prospecting of new oil and gas fields or unconventional extraction of fossil fuels. Reaching goals required by the Paris Agreement would need funding of approximately €23 trillion euro globally to reduce carbon emissions. Banks require new sustainable fintech infrastructure to measure and track the emissions reductions achieved via sustainable finance. Earthbanc’s Sustainable Finance API marks the start of a new era where financial institutions that are committed to achieving the Paris Agreement can easily report ESG metrics and turn that into an asset, by uncovering new sustainable lending opportunities.
Comentários