Escaping from the main stage for a hot minute, Finextra listened in to a pitch on the Sibos Discover stage, where Fabian Vandenreydt, chief strategy officer at Greenomy, outlined the ESG-focused fintech’s plan to streamline banks’ and corporates’ sustainable finance reporting in line with the EU Taxonomy, SFDR and CSRD/NFRD.
With 2,500 data points, the EU Taxonomy presents an onerous obligation for tens of thousands of European firms which are now mandated to report on their ESG performance.
“Where we come in,” Vandenreydt explained, “is to facilitate the capturing of the data, and the generation of the report for submission to the regulators.”
“When banks have say 3,000 counterparties with whom they each have a loan book, the banks have to collect the ESG data for each of those 3,000 corporations. Why? Because banks need to determine their Green Asset Ratio to publish to the European regulator. The due diligence is burdensome, estimated at a €2.5 billion compliance costs over the next 5 years.”
A pillar of this process involves capturing the “right kind of data” to ensure that the reports Greenomy generates for banks are robust and avoid greenwashing via manipulated or inaccurate data.
“We don’t want proxy data. Lots of data is being computed in the industry, approximated by the sources and that don’t come directly from corporates.
“Yet, the regulation mandates authenticated data at the source, so, we go to the source and collect the data directly from corporates. Our audit portal allows the auditors of that corporate to verify that the data is plausible and correct. Once this is completed, the EU Taxonomy alignment report of that corporate is ready and can be disseminated to the regulator, banks or investors.”
The fintech offers 4 cloud-based, interconnected portals which are customised to the reporting requirements of banks, corporates, investment managers, and soon insurance providers.
Euroclear invested in Greenomy in January this year (for an undisclosed amount), bringing the fintech’s reporting services to its network.
Vandenreydt noted that Greenomy is particularly happy to be welcomed to the Euroclear family as this “market play” feeds into the fintech’s ambitions to mutualise the data it is capturing.
He added that the more banks using the platform, the sooner and easier companies will be able to mutualise efforts and fulfil their regulatory obligations. Banks will also have the benefit of leveraging this corporate data for their own internal risk management, credit rating and other activities.
Greenomy currently has 12 banks connected to the infrastructure, and is in the process of selecting partner banks, credit institutions or CSDs across Europe that will allow its members to onboard and assess hundreds or thousands of corporates quickly – rather than becoming bogged down in a process of assessing one corporate at a time.
“Our mission is to accelerate the transition to a more sustainable future. Financial service providers have a huge job to play in financing that transition. Banks need to come in and help corporates measure their sustainability, financing them and being their partner in the green transition. I think it’s a huge opportunity for the banks to profile themselves as assisting the transition to a real economy.”
Later in the afternoon, Greenomy’s CEO Alexander Stevens pitched on the SWIFT Innotribe stage, taking first place in the category of sustainability. “It is a great honour to get the validation of our sustainability mission by major market infrastructures. We look forward to collaborating with SWIFT and its community.”