Thursday, December 1, 2022
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FeatureESG considerations as a fintech

ESG considerations as a fintech

Background
Founded in 1998, DDCAP Group (DDCAP) is an industry-leading market intermediary and financial system solutions provider, connecting 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. With its headquarters in London, DDCAP’s representative offices in the Dubai International Financial Centre, Manama and Kuala Lumpur provide a global footprint and enable the company to connect into ESG initiatives not only in Europe but also across the GCC and Southeast Asia.

Alongside its core offering, DDCAP frequently explores investment opportunities with early-stage Islamic market-focused businesses that have exceptional fintech strategies. DDCAP’s management is of the opinion that Islamic fintech SMEs like itself, and those within the wider Halal economy, have great potential to embed sustainable and responsible practices across the wider industry and considers such investments as a natural complement to its own ESG initiatives and industry goals.

Through DDCAP’s Sustainable and Responsible Actions (SRA) Programme, by which ESG considerations are addressed, DDCAP has made the public commitment to endeavor 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. To further support this initiative, 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
There has been a significant global awakening to the ESG agenda in recent years and, consequently, conversations have become more focused around how businesses can intervene to address an ever-increasing 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 total global emissions (this being more than the global aviation industry). Such considerations have been central to the ongoing development of DDCAP’s automated platform, ETHOS AFP, to ensure that ESG principles are embedded across its functionality.

In 2021, DDCAP committed additional 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 daily commercial activities and internal operations. 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 websites as well as reviewing email etiquette and in-box maintenance policies to reduce preventable emissions.

Conclusion
DDCAP has 25 years of experience in championing best practice and as part of its commitments made and achievements to date, 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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