Working toward carbon neutrality is a moral imperative for nations, corporations and individuals. The fact that sustainability is also a good business practice should convince business owners that it is well worth the effort.

This year will see many more organizations make strides to clean their workflows and processes of waste. As of June 2021, 59 countries—representing more than half of the globe’s greenhouse gas emissions—have ratified carbon-neutrality goals. Change is necessary and quickly unfolding at every level of society and government. Here’s how companies can begin going carbon-neutral and creating lasting value that’s independent of their balance sheets.

1. Define and Target

In the rush to adopt new technologies, it’s easy for organizations to sometimes forget to define what they intend to do. Even modestly sized companies benefit from taking stock of their workflows, divisions and footprints before setting out to adopt zero-carbon or carbon-reducing measures.

The CarbonNeutral Protocol is a certification standard for companies that want the following things for their carbon reduction goals:

• Transparency
• A clearly defined roadmap
• An understanding of the business benefits
• Internationally recognized credentials for steps taken

Like many “go green” efforts, decarbonization can also be a boon for business if company representatives are thoughtful about the roadmap. The CarbonNeutral Protocol isn’t the only certification process of its kind, but what they all have in common is a set of practical steps for companies just beginning this process.

Above all, these steps emphasize defining, measuring and targeting the easiest wins and the areas with the greatest opportunities for waste-cutting and growth. A company can’t become carbon-neutral without laying the groundwork with a full inventory of its existing environmental footprint.

2. Install Clean Energy On-Site

Solar energy usually becomes a major part of the conversation when companies pledge to take their supply chains and physical infrastructure in a sustainable direction.

For example, retailer Lidl GB has pledged to become carbon-neutral by 2022 and intends to do so by installing solar energy systems onsite at all of its new stores. By 2030, these and other changes should yield an 80-percent savings in the company’s total operational emissions.

Solar energy is the cheapest source of electricity ever, making it a vital part of a company’s energy portfolio—if that company truly intends to take sustainability seriously. 

3. Electrify the Fleet

By 2025, electric vehicles will be cheaper to own than light-duty vehicles with internal combustion engines. One case study involved replacing the United States Postal Service (USPS) fleet with electric cars. The financial savings could save taxpayers $4.3 billion by 2030.

This large-scale case study reveals just how cost-effective electric vehicles can be, whether the buy-in is one delivery van or a fleet of repair trucks. Over time, EVs are a vital part of trimming waste and making organizations carbon-neutral. They have the added benefit of being cheaper to maintain over time compared to gas-fueled equivalents, too. An automobile running on electricity is almost $1,000 less expensive per year to own and operate than one powered by gasoline.

4. Think Globally

Thinking locally is one of the major mistakes businesses make when it comes to environmental stewardship and corporate citizenship. Customer privacy is a parallel example that proves this point. For example, due to the California Consumer Privacy Act (CCPA) and the General Data Protection Regulation (GDPR), California and European Union residents now expect higher transparency regarding their online data.

What happens when those rules and expectations expand nationally and globally? This is not the only area where forward-thinking territories are helping to set new examples and precedents; they are also setting them for carbon neutrality.

International corporations and those thinking of expanding need to know what awaits them regarding local environmental practices and rules. The EU has a carbon trading system that outlines emissions caps in several sectors. Another prime example of an international standard serving as a sustainability tastemaker is PAS 2060. This standard and others like it represent a growing set of expectations and business citizenship standards against which expanding companies can judge themselves. Companies lacking a global focus could soon be left behind.

5. Purchase Carbon Offsets

Not every company has the capability to immediately transition its physical infrastructure and footprint to more efficient or carbon-neutral equivalents or models. The carbon market offers an alternative for cases like this: carbon offsets.

If a company cannot remove as much carbon from the atmosphere as it contributes, it can purchase carbon offsets to close the gap. In the simplest terms, this means businesses contribute funds to outside efforts working to mitigate climate change, such as the South Pole Group. The goal of creating a carbon market is to make this exchange rate—money for tons of carbon—easy to understand and navigate.

6. Reconsider Materials and Assets

The physical assets and materials a company leverages to complete its work and contracts are a wide and varied subject of conversation. It’s also an essential one. For example, up to 60 percent of a building’s greenhouse gas emissions, including carbon dioxide, can be traced to the construction phase. The materials themselves account for up to 40 percent.

There are lower-carbon alternatives for almost every material a given company relies on during their standard operations:

• Paper vs. digital spreadsheets
• Timber vs. concrete
• Aluminum roofs vs. asphalt shingles
• New fabrication vs. recycled materials
• Cellulose insulation vs. fiberglass insulation
• Reclaimed paper and cardboard vs. newly printed materials

More customers prefer to see transparent efforts by companies to reuse materials when they can and use low-carbon materials when they cannot. A post-COVID-19 survey revealed that supply chain uncertainties have not dulled interest in sustainable products. Two-thirds of polled consumers expect companies to be fully transparent about their products’ ecological benefits and impacts. Another survey showed that 64 percent of consumers would pay a premium if it meant buying from an ecologically minded company.

Meeting these demands is good optics as well as a net positive for the planet. Becoming carbon-neutral requires a full accounting of the material goods businesses rely on and an understanding of how low-waste, low-carbon alternatives fit into the picture.

Becoming Carbon-Neutral Is Good Business

Whether due to day-one savings, a more balanced budget over time or improved PR and customer sentiment, eliminating sources of carbon and greenhouse gas emissions at the corporate level is simply good business. Organizations can take several practical steps, such as the ones listed above, to ensure their place in a greener future.

We’re living in an age of experience, extreme consumerization, and very rapid change. Just keeping up is a major challenge for companies. What is good today may not be relevant tomorrow, and a new service or product line today could be cannibalized by something much better depending on what comes next. But brands must do more than just keep up. They must rethink how they operate to better anticipate consumer needs. As a result, companies need to rethink the relationship between operations, people and technology.

Historically, a company could consider sudden market shifts as “black swan” events, but today such events (think natural disasters, pandemics, etc.) seem to happen more frequently. Businesses must adapt as quickly as markets change, and intuitively deliver experiences based on new-age product lines and services. To achieve this, they must cut across old silos. And they must build frictionless, seemingly invisible work processes that reflect the new need for greater operational agility and fluidity.

Enterprises have invested heavily in technology but little attention has been given to the processes sitting on top, which tend to be choppy. Many of these processes are, at best, inconsistent. And they often are completely broken. Leaders need to think about processes as the end-product of their technology work, the end outcome that serves customers and the market.

But even in a highly-automated age, processes will still be driven by people. So, thinking about how you motivate, train, and develop them will be the best path to better serving customers. Several key approaches will help guide your strategy. First, think of the outcomes you want to achieve. Second, consider that those outcomes will best be driven by having the right kind of people in place. Finally, take advantage of the new ways technology enables you to turn any businessperson into a programmer, or put more \\simply – engage in “citizen coding.”

Optimizing operations with outcome-oriented thinking

We need to rethink the relationship between business operations and technology.  Many leaders think their companies have been digital for the better part of a decade. However, the pandemic exposed critical gaps in between how digital they thought they were and how far they still have to go. Now they aspire to a state where “everything is digital,” but it’s unclear what that means and what companies should do to get there.

To paraphrase author Stephen Covey, start with the end in mind. Digital transformation must begin with a clear sense of the brand’s purpose in the market, which then should lead to reconfiguring work processes to achieve your purpose. First, identify the problem you are trying to solve and the value you are trying to deliver. From there, consider the kind of customer experience you want to create, the one that best reflects the values of your brand.  Only then can you decide how best to render work in a digital manner that brings modern workplace efficiencies and differentiated convenience to customers.

Getting there requires a radical rethinking of the relationship between IT and business functions.  In fact, the lines begin to blur, and that’s good. Technology needs to be considered in the context of what you are trying to deliver to the market. When we talk about process transformation, or even enterprise digital transformation, technology should not be the first thing we think about.

The Threat of Digital Sameness

As nearly every company in recent years has found itself both inspired and intimidated by Amazon’s astonishing capabilities and the often-cited “Uberization of everything,” a dispiriting haze has afflicted the digital experience of brand after brand. Many pundits call this “digital sameness,” a too-formulaic customer experience that fails to convey the unique feeling and value of a specific brand. This sameness can be avoided by taking a resolutely customer-centric approach to work processes. It means knowing your customers and what they value about your products or services, and ensuring that their digital experience with you uniquely reflects that.

To avoid the cookie-cutter approach, it’s critical to create a new empowerment in two ways—among employees and across your entire corporate ecosystem. Allow and encourage employees to focus on customers in all they do, and reward them for creatively doing so. And find every possible way to coordinate the supply chain, too, to concentrate all its efforts on customers. Brands that work fluidly with their employees, suppliers, vendors, and partners will better be able to give customers a differentiated and memorable experience.  

“Intelligent automation” is what we call the collection of technologies that combine to transform your processes to create exceptional experiences for customers. It is a lever to create fluid and adaptive business processes that are critical to building and delivering innovative products and services.

Take, for example, an international agricultural company that sought to streamline its largely manual and fragmented order fulfillment, financial reporting and customer care processes. We worked with the client to take an end-to-end approach using intelligent automation. This allowed them to improve how they served customers while reducing unit cost and cycle time, from procurement to final delivery.

Automation unlocked 52,000 hours per month, allowing associates to take on higher value work. The client’s citizen coders manage 80% of the automation development process. To date, they have created a variety of bots from a strong pipeline of automation processes. Automating the order entry and fulfillment processes improved average handling time by 75% and saved $20 million so far, generating a 4X ROI.

The softer side of digital business

During the pandemic, company after company declared they were responding aggressively with digital. The harsh reality, though, was that they realized how reliant they were on human beings.

Technology is evolving at lightning speed, and valuable capabilities are emerging that will make a big difference in every company. However, we have over-indexed on a workplace future that prioritizes machines over people. The implicit assumption is that as business becomes more digital, employees must adapt and fit in.  Instead, we need a better understanding of the digital worker ecosystem. Imagining a less “human-centric” future is misleading. The truth is, human-digital collaboration will be a key driver for how work will get done.

To drive the scale of ongoing business transformation, the key will be to unlock the talent base that already sits within an enterprise. The goal should not be only to think how to replace them, but rather how to get them to embrace a culture of digital thinking.

Many business leaders have a mindset that can be characterized as “Hey, let me skill my workforce. Let me make them a little more technically trained, and so on and so forth.”

But if you think about it as a “skilling” exercise, all you’re going to do is give people better tools to use with existing systems, and make those a little more efficient. This approach can calcify existing operations and make it harder to evolve modern ways of working. To be a fully digitally-enabled enterprise, you need to ask: What type of employees do I need within that ecosystem? Will they be cubicle workers? Repetitive workers? Or experts who can sit alongside digital workers, or “bots,” including those created by Robotic Process Automation, to focus on the needs of customers? For the enlightened enterprise, the answer will be the latter.

Bringing on more bots doesn’t mean you can get rid of humans. Technology is still far from advanced enough for that. People have the ability to think deeply, which computer algorithms don’t possess. So you need to ask: “What kind of workflow do I need? Do I have that skill profile today?” Your people must be partners to help constantly evolve your digital capabilities. Yes, they will acquire new skills, but more importantly, they will partake in a new operational mindset.

Citizen coding

When I talk to operations teams inside companies, I’m often surprised by their lack of appreciation for technology. I don’t expect them to be coders – to be proficient in writing programs or even understanding how that is done at any level of depth. But they must appreciate what technology can do, what pathways it can create.

For those leaders trying to drive positive change inside companies, a fantastic way to drive digital transformation at the grassroots level has emerged. It’s the low-code/no-code movement. People who have no training in programming and don’t think of themselves as technologists can now begin to engineer software. I call it “citizen coding.”

Citizen coding will only increase the utility and relevance of software since the people doing the coding are more likely to be ordinary business people. Over time, citizen coding will progress across many dimensions. Consider this: – one day, citizen coders could invoke voice-enabled commands to guide the entire software engineering process.

Low-code/no-code programming tools can help drive corporate transformation at the grassroots level, and empower less technical employees to move forward without fear that technology might cannibalize their jobs. They’re the ones writing the code, and they know how to improve their work and their company. And ultimately, such an approach can take companies to significantly higher-value business models.  

Some IT purists possibly resist low-code/no-code since they don’t always appreciate the value and talent that can be unlocked by empowering business teams to use such tools. Having come from the IT side, I too was skeptical of this movement. End-user software built by amateurs? That’s almost like a shadow IT organization! But I’ve gone from a skeptic to a convert. IT leaders should consider such tools, if properly selected, governed and used, can accelerate the software development lifecycle — when combined with traditional programming approaches.

In fact, I’ve been pleasantly surprised by the enthusiasm with which teams take to such tools once we orient and train them. And the way the low code/no code platforms are evolving increasingly includes governance and orchestration structures that ensure the resulting systems are safe and integrated well with existing enterprise technologies. Other new tools emerging alongside this movement, such as “process discovery and intelligence” software, help continually monitor processes and automatically generate suggestions for improvements, which further helps accelerate the pace and scale of transformation.

It was a classic technology CEO quandary. The medical device company that Susan Hertzberg leads, BrainScope, was ready to bring its device and software to assess mild traumatic brain injury to a wider market. Unlike expensive, radiation-heavy and hard-to-schedule CT scans, BrainScope can help assess the likelihood of a brain bleed in 20 minutes while at the same time providing an assessment of the severity of a concussion. Hertzberg was hesitant to ask the company’s true-blue investors, who had been loyal through 12 years and seven funding rounds, to provide more capital or to further dilute their financial stake. Seeking a way forward, Hertzberg says, she began nonetheless talking with potential equity partners.

During the summer of 2021, a new option presented itself. Aon, a leading global professional services firm that already served as an advisor to BrainScope, introduced Hertzberg to the idea of intellectual property (IP)-based valuation and related non- or minimally-dilutive funding. BrainScope could raise money based on the value of its IP—and lenders could have peace of mind, knowing the asset was valued using Aon’s data-enabled algorithms and insured like any tangible property. After consideration, Hertzberg opted to go down the path of IP-backed lending. 

BrainScope and Aon announced a $35 million IP-backed lending arrangement this fall. The funding arrangement provides BrainScope the resources to expand its commercial footprint to reach more hospitals and connect with concussion centers enabling doctors to get rapid, objective insights about the likelihood of brain bleeds and concussions. Further, the “concussion index” capability added earlier this year gives clinicians the first objective, brain-based biomarker tool to track concussed patients, athletes, and military personnel and aid in determining their readiness to return to activity. With 70 million head injuries reported annually around the world, the company will be able to expand globally as well. Next-gen versions of the device show promise in detecting stroke, dementia and depression efficiently.

Aon may be one of the first to help companies articulate and realize the full value of their IP portfolios, but IP looks likely to be a significant focus in 2022. Why now? A more apt question might be, why not earlier? Today, intangible assets account for 90 percent of the value of the S&P 500 (and 90 percent of the value of Fortune 500 companies), according to a report from Ocean Tomo. Translation: That’s $20 trillion plus in the S&P case. Then there’s the explosion in intellectual property that’s taken place in the past 30 years. To put the acceleration in context, it took more than a century for the U.S. Patent office to record its millionth patent, but just three years for it to go from 9 to 10 million, which happened in 2018. Lewis Lee, a longtime patent attorney who heads Aon’s IP Solutions, puts it this way: “If data is the new oil, IP is the new gold.” 

Yet the financial landscape has been slow to change. Much of the problem has been that IP is harder to put a cash value on compared to, say, real estate or product inventory. But Aon’s solution, which is “developing the ability to measure IP at scale” in Lee’s words, is changing that. “Our platform aggregates not only intellectual property data but also financial data. We look at risk data, we look at litigation data, we look at licensing data and then we use a series of algorithms to understand those in a material way.” AI, machine learning and natural language processing are put to use in the technique. The result not only presents a stronger assessment to funders and insurers of a company’s IP’s value, but ties it to revenue streams and shows how the two will only become more inextricable.

Skeptics might ask, how are lenders going to protect themselves if, say, a copyright infringement or cyber security breach occurs? Insuring a building against a fire is one thing, admits Lee. Losing a key trade secret can be the end of a business forever. But again, he points to valuation. If you can put a monetary value on something, it can be insured—and Aon was able to “wrap” the deal for BrainScope with “a collateral protection insurance wrapper.” Further mitigating risk, he continues, is that clients appear very motivated to deliver on their profit promises in this lending configuration. “All they really have for value is their IP. They’re loath to lose it, so it would be very reasonable to expect that they’re going to do their best to make good on these loans.”

The first companies to use Aon’s new valuation tools and capital solution, which include eco-minded agritech Indigo Ag and razor company Shavelogic, show signs of success. Hertzberg says Aon’s combination of nimbleness—BrainScope’s IP report, which establishes the scope and value of the portfolio, was completed in record time—with industries-spanning business expertise makes it an ideal collaborator. “They’re insuring health systems, they’re in the personal injury market, in corporate wellness and workers compensation [so they’ve become] a strategic partner who’s going to help me actually grow this business.” Here’s a solid indicator of the potential for this new lending arrangement: Aon is developing its own proprietary lending solution to help support this business. Today the company works with a multiplicity of lenders and borrowers, totaling in the multibillions on both sides, who want to partake in the new lending model. “It makes sense,” says Hertzberg. “If you think about intellectual property and how much that’s the driving force behind so many different kinds of businesses today, it’s kind of a gem. They’re finding ways to unlock that value to create more value. I don’t think that trend is going to go away. I think it’s going to accelerate.”

I’m a payments innovator who has lived and worked around the world for a large global bank for nearly 20 years. For a long time, the best way to improve payments for businesses and consumers was to build on top of the existing financial infrastructure.   But what is clear is that we now need a truly digital form of money:  thoughtfully constructed and appropriately regulated fiat-currency-backed stablecoins.  Just as a range of previously physical things have gone digital in our lives to provide better experiences and instant gratification, so must money.

It’s easy to see why the current payments infrastructure has endured.  Trillions of dollars of payments are reliably and securely processed each day around the world.   Cross border and domestic payments globally have become cheaper, faster and easier for many people over the last five to ten years.  This happened because of the arrival of fintechs, technology advancements, regulatory support to increase competition, the launch of domestic instant payments schemes in markets around the world, and because banks invested in improved payments capabilities.  But these improvements have not gotten us where we need to be.  The digital form factors of money that do exist, like credit cards, are insufficient to support where the world’s economic activity is going.

To be able to finally crack the code on today’s unsolved payment challenges of cost, time and access – and for the new digital economy to thrive, money around the world that consumers and businesses use daily needs to go fully digital.   Tweaks and incremental improvements to today’s analog money won’t get us there.   

Trusted stablecoins like USDC are digital versions of the money you use every day.   Unlike other cryptocurrencies, stablecoins have the price stability and value referenceability of commonly used and held fiat money – like the U.S. dollar – to make them relevant for consumers and businesses in everyday commercial transactions.  And because stablecoins are entirely digital, they can do things your existing money can’t do today.   

Stablecoins are globally mobile across economic ecosystems, enabling instant settlements, micropayments, and are always on, 24×7, 365 days a year.  This means the digital properties of stablecoins will address the current pains of remittances and cross-border payments, for example, by enabling inexpensive instant settlement across borders. This alone will offer tremendous value for a large number of people worldwide.       

All stablecoins are not the same, however. I serve as a special advisor to Centre, founded by Circle and Coinbase. It is a stablecoin standards organization providing a reliable, replicable framework for stablecoin issuance based on the principles of transparency and integrity, starting with USDC.

Digital money is essentially code, enabling programmability. So transactions can be seamless for users – if I receive the asset, then you will receive the funds, without anyone having to issue manual instructions or an institution intervening.  

The benefits will be many. Stablecoins will ensure, for another example, that content creators for the first time will be able to reliably enforce their intellectual property, as the assets they create are shared, trade hands and potentially rise in value.  Stablecoins will power micro-entrepreneurs who sell products online through videos, and enable advertisers to efficiently make instant micropayments to influencers. Real-time global digital commerce, which people everywhere are increasingly participating in, requires real time digital settlement across borders.  Access to money will be democratized– if you have a phone, you will be able to have an operating account to receive payments and send money. You’ll also be able to participate in decentralized finance (known as DeFi) to access credit and grow your wealth.

While most national governments are currently assessing issuing digital currency (known as central bank digital currency or CDBC), there are many profound design considerations.  For example, how private will citizens want or need CDBC to be?  What will commercial banking’s role be if you leave your deposits at the central bank, and who will provide lending? So it will take a long time for many countries to issue CDBC, and it will likely be largely focused on domestic use cases and priorities.  Meanwhile, we need digital money that will work globally today, and the private sector is moving forward with solutions.

Contrast the opportunities offered by digital money and the emerging digital economy with the payments systems we have today. They are fragmented, with very limited interoperability and restricted access.  Payments generally work well when you are within a specific ecosystem, but they stop working well whenever you leave it. It’s expensive, time consuming, painful and sometimes technically impossible to move money across ecosystems. So for both consumers and businesses, sending wire payments from country A to country B is too costly and difficult. For those people sending remittances of hard earned funds home to their families, it costs too much and takes too much time. It is still expensive for a merchant to accept digital payments from customers. And there is an urgent matter of fairness: access to financial services is still largely limited to those consumers and businesses that can afford it. That is inconsistent with the democratization of access that the internet otherwise enables.   

The world is hurtling towards a new phase of the digital economy, well beyond the traditional e-commerce activities of merely buying physical goods online. We are entering a new and critical chapter of the internet’s evolution, sometimes called Web3. This move means we are going from accessing a world of information (“read”) and publishing all kinds of content (“write”), to an internet that will enable true ownership. Read, write, and own.   

This next-generation global digital economy means that the impressive and wonderful creativity of humans can be appropriately and fairly rewarded. For the first time unique digital assets will be created, bought and enjoyed by anyone else in the world. It also means that most folks will be spending even more time online. We are living increasingly digital lives, in digital worlds. The metaverse is a real thing, and you may want to own a digital piece of land and a digital wardrobe, perhaps even more than you will want many physical goods. You are likely to be spending more of your discretionary income in the future on digital assets that reflect your passions and hobbies, which may enable you to experience and enjoy these interests more dynamically than by owning static physical goods.   

The digital economy, digital assets, and the metaverse are by definition global, transcending our physical locations. While we are still in the very early days of this future world, the implications on the future of money are profound. Trusted, well-designed and well-implemented stablecoins will be an important part of the answer.  

Morgan McKenney held a variety of senior executive roles globally in payments innovation for businesses and consumers at Citi for the last nearly 20 years.  She is currently a special advisor to Centre, established by Coinbase and Circle to support the development of trusted stablecoins globally, starting with USDC.  Morgan is also a Limited Partner Advisor at Nyca Partners, a leading venture capital firm focused on connecting innovative companies to the global financial system, an Executive-in-Residence for Global Blockchain Business Council (GBBC) and a Bain External Advisor. 

Published in partnership with Worth.

From checking your online statements to trading stocks, digital finance has quickly become something that we cannot live without. At the recent Health+Wealth of America conference hosted by Techonomy, CDX, and Worth, industry experts Sarah Kirshbaum Levy, CEO of Betterment, and Kevin Pleiter, managing director of capital markets at Cognizant, joined a panel to discuss the ways in which fintech will continue to permeate and improve the financial sector at every level.

The fintech revolution has opened the doors to a broad array of financial possibilities that have democratized aspects of wealth management that have previously been difficult to access. Kirshbaum Levy said she is hopeful that technology advancements will lend themselves to long-term thinking about retirement benefits, democratizing the process and allowing everyone to plan for the future with ease and understanding. Pleiter sees the rapid advancements in financial technology as an opportunity to provide not only education but valuable, high quality wealth advice to a broad audience at a fraction of the cost. He also noted that the capacity for hyper-personalization of wealth management is made possible by advancements in the fintech space, effectively breaking the mold of traditional wealth management techniques that consisted of portfolio silos with each client being delivered the same model portfolio as thousands of other clients.

Through the advancement of technology, personalized financial strategies can be tailored to each individual’s needs and circumstances. One of the practical ways personalized portfolio management has improved due to technology is through machine learning and AI. Kirshbaum Levy pointed out that machine learning has dramatically streamlined the process of portfolio management by tailoring and rebalancing your financial portfolio, which can also be overlaid with rules about risk tolerance and tax preferences. 

Over the course of the past two years, most everyone’s personal and financial needs have shifted in a way that legacy banks could not navigate without the aid of fintech startups. As moderator of this session and Clarim Media’s chief content officer James Ledbetter pointed out, startups in the fintech industry market themselves as revolutionaries that are here to replace big banks; however, the reality of a forced adjustment to online banking and wealth management is that without the innovation of these startups, legacy banks would not have been able to deliver the same level of service to their client bases over the course of the pandemic. Thus, partnerships between fintech and legacy banks were a crucial step toward the survival of these two competitors. 

While fintech brings a lot of benefits to the financial sector as a whole, Ledbetter pointed out that there are also downsides—such as the gamification of investing and trading. Kirshbaum Levy and Ledbetter discussed that, as a fiduciary, Betterment is obligated by law to advise their clients to act in their own best interests, whereas financial services and platforms that promote ease of transaction may be taking advantage of their users. “Nothing is ever really free,” she says, noting that when you are dealing with platforms that encourage ease of transaction over a long-term holding strategy, the user becomes the product.

The effects of fintech on the financial sector as a whole are pervasive and largely beneficial. Through the advancement of technology, AI and machine learning, the fintech revolution has the power to help create hyper-personalized portfolios, democratize aspects of financial planning that might otherwise remain obscure and allow legacy banks to work in tandem with new tech to provide high-value service at a fraction of the cost. However, with great power comes great responsibility and that power has been placed in the hands of the consumer. The gamification of investing and trading opens the door to a host of dangerous possibilities that may place the unknowing user at risk.

Published in partnership with Worth.

If you’re reading this, chances are you already know what ESG is. In fact, you might even be invested in companies that meet ESG standards. And while using ESG can help investors invest more responsibly, it is not the same as impact investing. Whereas ESG is a set of criteria, impact investing is a strategy, and not necessarily one as focused on financial gain as much as positive social and/or environmental change.

“I think what a lot of people don’t understand about ESG is it usually is really focused on looking at those environmental, social and governance factors that are going to have a material financial effect on the company,” says Kim Griffin, member engagement director at Toniic, at the recent Health+Wealth of America conference, hosted by Techonomy, CDX, and Worth. “So it’s really still rooted in looking at the financial impacts of the company, which may or may not meet expectations of investors who want to solve the climate crisis and have more flexibility on financial risk and financial return expectations.”

Griffin often finds people think ESG is a broader framework than it actually is. Andrew Lee, managing director and head of sustainable and impact investing at UBS, continued with that thought, explaining that he thinks the terminology trips people up, but he wants investors to be more concerned with determining what their goals are with their investments and making sure their portfolio is set up to align with those intentions.

When it comes to impact investing, Lee defines it as “driving measurable positive change.” One of the key differences between ESG and impact investing is that impact investing is far more focused on the positive social/environmental outcome, whereas ESG usually warrants better financial returns. Of course, many investors are in it for the financial growth, but Griffin says that while there isn’t necessarily a trade-off for impact investors, we’ve arrived at a time where investing in the greater good can round out a diverse portfolio.

“We’re lucky that we’re at a time where the impact investing in the ESG market has matured and grown enough that you can build an entirely diverse portfolio that is aligned to impact in some way,” Griffin says.

Lee notes that there are opportunities for impact investing to deliver not only positive change, but also good financial returns.

“There are opportunities, certainly in the areas of climate, health, education and elsewhere, where the opportunity sets are so large that there are commercial solutions that can really deliver at above-market-rate returns while having that tangible positive impact. But it’s not everything,” Lee says. “There are some areas where you might have to take [a] longer time risk or perhaps the risk that the financial return won’t quite be there in order to really solve problems in certain geographies.”

For investors who want to do good while also maintaining a full portfolio, Lee says diversification is critical.

“I think there are a lot of opportunities for sustainable investors or people looking to drive impact, and it’s about being specific about that,” Lee says. “But diversification is good across full investment portfolios. So, it’s important to think about making sure there’s diversification so you’re not overly concentrated or exposed to specific risk.”

Will American democracy survive? It’s a sad question many of us are asking these days. It’s also the title of the opening session at our Health+Wealth of America conference on Thursday Dec. 16 in midtown Manhattan. Addressing it will be Don Guttenplan, recently-appointed editor of The Nation. We are duly excited that this will be our return to in-person conferences. Here’s our great program.

It’s not an optimistic time in our country. But we are determined to seek signs of progress and arguments for it. And our speakers are eloquent. Not to mention diverse. We are probing where our country and the world are going, and you have to look at that diamond from many angles. We hope it’s not really a lump of coal. The conference is co-hosted by Techonomy, our CDX digital transformation subsidiary, and Worth Magazine, our corporate cousin inside Clarim Holdings.

Worth has shifted towards a broader definition of “worthiness,” and is launching a new list called the Worthy 100—entrepreneurs changing the world for the better. Jacqueline Novogratz, founder and CEO of Acumen, is one of the world’s most visionary change-agents, and she is on the new list. She will also be on our stage as the closing speaker. Her view is that Americans take too narrow a view of who and where they are, and that needs to change, particularly in a world beset by climate change, global pandemic, and potentially uncontrollable immigration. Her session is entitled “Declaring American Interdependence.”

The morning ends with the very Anthony Scaramucci, on “Why Bitcoin Is Headed to Half a Million.” He’ll surely give us, too, his latest assessment of Trump. Then we’ll have breakouts, lunch, and return to hear activist, author, and politician Zephyr Teachout, who recently announced her candidacy for attorney general of New York State. She’ll be interviewed by brilliant Financial Times columnist Rana Foroohar, about, among other things, why we need to break up big tech.

Markets may be mostly up, but it’s often hard to see progress underway on the big systemic things that matter—equality, global warming, education, health care, and especially the pandemic. One of our speakers who can find that progress is Amanda Leland, the recently appointed executive director of the Environmental Defense Fund. She’ll talk about EDF’s war on methane, its upcoming satellite to find and monitor it, and why even as we fight determinedly against global warming, we must work to help those most vulnerable to it. Then two other top leaders of EDF, Heather McTeer Toney and Dr. Margot Brown, will (in a breakout) explain why EDF is so focused on environmental justice–ensuring disadvantaged communities get a voice in environmental policy and that climate action doesn’t only benefit the rich. Separately, two top leaders in impact investing, one from UBS and one from Toniic, will explain how the way we direct our money can be critical to tackling climate change and social problems generally.

Is the Democratic Party “sleepwalking to catastrophe” asked columnist Ezra Klein recently in a profile of the uncannily-accurate pollster and political analyst David Shor. This expert will tell us why he is deeply worried about the direction of the Democrats. We blend politics with economics, because it’s all connected.

Business leaders will also be there in force. Betterment CEO Sarah Kirshbaum Levy joins Kevin Pleiter, head of the capital markets group at global technology consulting firm Cognizant, to discuss the direction of fintech. How could the dizzying range of entrepreneurial financial innovations work better together?

It’s a time of health care crisis, confusion, and, too often, suffering. Veteran investor, author and pundit Esther Dyson has turned her life towards philanthropy with a big long-term project called Wellville. She’s working to help five less-affluent counties around the U.S. better build systems to keep people healthy, as she’ll tell us. Alberto Casellas, EVP and CEO of Synchrony Health and Wellness, describes how Americans can more affordably pay for health care. Top business strategist Rita McGrath joins healthcare communications veteran Ritesh Patel to examine how innovation is changing the pandemic-era patient experience. Jim McCann, founder and Chairman of 1-800-FLOWERS.com, delves into the emotional lives of Americans in this painful pandemic era, which his company uniquely engages with. He’ll be joined by PTSD expert and psychiatrist Dr. Charles Marmar of NYU Langone.

Health care is a crisis especially for mothers in many parts of America, so Simmone Taitt, CEO of Poppyseed Health, a company focused directly on maternal health, helps us understand how that has to change.

This diamond has multiple facets. Google’s Jesse Haines explains how the search giant is working to enhance job creation and entrepreneurship with its Grow With Google initiative. Valarie McCall, chief of staff for the mayor of Cleveland, joins three other women leaders to dissect why women still have so much difficulty breaking through in male-dominated industries like government, real estate, and insurance. Immediately afterwards, we’ll hear from Anoop Gupta, CEO of startup SeekOut, which a group of Microsoft executives recently started to bring more fairness to hiring and diversity to organizations, using algorithms and better software design.

New School Professor Natalia Petrzela, a historian of American culture, talks about both her upcoming book FIT NATION: How America Embraced Exercise As The Government Abandoned It, as well as her extremely-relevant previous one, entitled Classroom Wars: Language, Sex, and the Making of Modern Political Culture.

There is, of course, much more, especially on climate and innovation. Full list of speakers is here and the agenda is here. And the all-important registration page is here. Vaccinated only, of course. But while the in-person experience will be incredible, you can also join us for free online if necessary.

As holiday shopping season hits us, the whole payments space is starting to feel like a swingles bar at closing time: a lot of sudden pairings that may or may not make sense in the morning. FIN continues to think, for example, that Square’s $29 billion purchase of Australian Buy Now, Pay Later (BNPL) hegemon Afterpay was an extravagant indulgence.

But one player that is deadly serious is Amazon; its cost of payments is higher in the US than in any other country, and the company seems determined to fix that.

This week the global retail giant announced that, as of 2022, it will accept Venmo for payment. (This tryst could only happen now, since Venmo parent PayPal’s historic relationship with eBay prohibited it from getting hitched to another e-commerce platform.) Perhaps more stunning was the announcement that Affirm will be Amazon’s exclusive provider of BNPL purchases (of $50 or more) until January 2023.

It’s a striking partnership, especially given that Affirm seems to be following Amazon’s historic path of breakneck growth with no profit in sight (as part of the deal, Amazon gets the rights to buy a portion of Affirm stock). Affirm, which also announced a powerful deal with Shopify this week, now has more than 100,000 merchants on its platform, up from about 6500 a year ago. At the same time, its operating losses in 2021 were about three times as high as in 2019. This slide from a recent Affirm filing shows the tide of red ink continuing:

It stands to reason that Affirm and other BNPL providers will prosper during the holiday spending season. At some point, however, Affirm is going to need to deliver profits; how it does so without sacrificing some of the attractions it currently offers consumers is a well-kept secret.

Acima and the Darker Side of Fintech

Sometimes the more glamorous parts of the fintech world—players like Klarna who can splurge on Super Bowl ads—seem to rub elbows with the grittier characters in personal finance. In recent months, for example, while BNPL has received market accolades, some observers have pointed out its overlap with the considerably less celebrated world of rent-to-own.

The rent-to-own space has been quietly growing, particularly in noncoastal parts of America where the economy never really recovers, and where underfinanced Americans often lack access to credit. One of the dominant players is Acima (now owned by Rent-A-Center), whose model works like this: a customer identifies a product she wants—an appliance, say, or a piece of furniture—and applies to Acima. She then gets approved to spend a certain amount of borrowed money at a given store, and works out a lease with Acima to make regular payments (usually over a year more) until she owns it. Essentially all of this can be done on a mobile app.

Acima’s modest origin story has some unlikely turns. The company emerged from the “Silicon Slopes” hub of Salt Lake City, launching in 2013 as Simple Finance, a quick way for consumers with no or little credit to finance purchases. Cofounder Aaron Allred had no background in finance; for the first year or so the software he used to manage payments for leases was the system he used for his pest control company. In 2016 it took in a $10 million investment round led by Aries Capital Partners (also Salt Lake City-based) and it grew into a colossus. When publicly traded Rent-A-Center acquired Acima in December 2020, the pricetag was $1.6 billion. Acima recently announced a partnership with Mastercard to issue a “leasepay” credit card that simplifies its offerings even more.

Since that time, Rent-A-Center’s recurring regulatory filings have revealed that Acima seems to be constantly near or beyond the point of breaking the law. In October 2020, the federal Consumer Financial Protection Bureau (CFPB) served Acima with a Civil Investigative Demand, to see whether it was complying with various consumer financial protection laws. Acima shows up more than 600 times in the CFPB complaint database, but to date no charges have been publicly made. This week it was revealed that the attorneys general of 39 states are investigating Acima for possible violations of consumer protection laws. It’s a good reminder that when fintech companies boast about serving the underbanked, it’s not always with the purest of intentions.

Will Binance Be Sued to Death?

When you understand the vast amount of money tied up in stablecoins these days, it can be staggering—indeed frightening—to realize just how unstable the technology underpinning these coins is. The chart below comes from the recently released US Treasury Department Report on Stablecoins. Binance, which is actually the largest cryptocurrency exchange in the world, also has a coin which may be a distant third in size but still a significant player:

From that phenomenal growth one might readily assume that Binance has had a great year. Actually, however, in May Binance had a tech hiccup for which it’s still paying the price (and is under investigation or has been charged by regulators around the globe). With Bitcoin and Ethereum trading volumes very high, Binance disabled Ethereum withdrawals citing network congestion. As with Robinhood, Binance had shortchanged customer service and suddenly found itself under assault.

“We have way too many customer support issues on backlog,” CEO Brian Brooks said in an interview at the time. “I know it’s a big deal. We’re all over this and you’re going to see a different customer experience very shortly.”

Regulators, however, have a hard time pinning down an organization that has no headquarters or even licenses. Frustrated Binance customers have taken the matter in their own hands. It looks a little like one of those “Do you have mesothelioma?” ads, but Binance Claim is an active site that has had more than 2400 people sign up. Claimants are being represented by White & Case, and the proceedings will be handled by the Hong Kong International Arbitration Centre. It’s an open question what will happen to the Binance coin if the exchange is sued out of existence.

This piece originally appeared in FIN, James Ledbetter’s fintech newsletter. Ledbetter is Chief Content Officer of Clarim Media, which owns Techonomy.

THURSDAY, DECEMBER 16 | AN ALL DAY HYBRID EVENT

Techonomy, CDX and Worth host our first full-fledged, fully-vaccinated in-person event! We invite you to join us in midtown Manhattan (or virtually) for the latest installment in our Health+Wealth of America series, where we’ll bring together experts on our national mood and politics, the future of business, the pandemic, the state of tech and transformation, the push for equity, healthcare, education, climate responsibility, and more.

At this all-day event near Grand Central Station, we’ll bring together speakers like: EDF’s Amanda Leland, Anthony Scaramucci, health care activist Esther Dyson and Don Guttenplan of The Nation to discuss what is happening with the health and wealth of America, defined broadly.

We are really excited to return to face-to-face – our collective conversation has only grown greater during the past year and a half. We look forward to seeing you there.