“Climate fintech” needs to decide what it is

Climate fintech funding rose to $1.2B in 2021, according to CommerzVentures. Carbon accounting attracted the most funding, raking in $410M last year.

Why should we care?
The “climate fintech” landscape can only be as strong as its weakest or least convincing link. With climate change presenting an increasingly distressing existential threat, everyday consumers—in larger numbers and with greater urgency—will look to businesses (as well as politicians) for a coherent response. The measurement of businesses’ carbon output through carbon accounting is certainly important, but the dominance of this field within “climate fintech” muddies the larger field’s reputation by prioritizing the quantification of greenhouse gas emissions over their mitigation. Investors should consider the long-term implications of their interest in carbon accounting, especially as their funding zeal compares to other “climate fintech” initiatives; ecological costs matter, as do reputational ones.