The Connector Podcast - SFF 2022 - Greenomy

Welcome to the Connector Podcast, an ongoing conversation connecting fintechs, banks, and regulators worldwide. Join CEO and founder Koen Vanderhoydonk as you learn more about the latest available trends and solutions in the markets.

Welcome everyone, and we're back live from Singapore FinTech Festival, and now I have with me Alex. Also from Belgium, but here in Singapore. I heard you have been traveling a lot. Please explain us.

Hi, Koen. Indeed, I've been in Hong Kong, Bangkok, and Singapore in the course of one week.

Wow.

So a lot of traveling, very intense, and I'm still jet-lagged.

I'm here for a week and I'm still jet-lagged. So I can believe for you, it's horrible. But what have you been doing then?

Okay, so green financing is booming around the world. And you also have these green taxonomies legislations that are being adopted across jurisdictions. And here in Asia-Pacific, Malaysia was the first to adopt a taxonomy. And then you have the ASEAN region that's also creating a regional taxonomy framework. Hong Kong, Singapore are also on their way of adopting their own framework. So what we've seen, you know, in Europe with the EU taxonomy, and the challenges that are being faced by banks, asset managers, issuers, all the financial players will also happen in other jurisdictions. So we're here to see, you know, where the different countries stand and where potentially we can assist.

And maybe for the audience, I would like to just go in the helicopter for 1 minute. When you talk taxonomy, can you just explain a little bit more what that means?

Absolutely.

Yeah.

So taxonomy, basically, let's say you're a company and your activity is producing hydrogen. Now, to be considered sustainable, you have to go through a series of screening criteria. And for example, for hydrogen, you have to emit less than 1.4 tons of CO2 per ton of product.

Mm-hmm.

And so today, green taxonomies basically tell companies to measure how much of their turnover, CapEx, OpEx, is aligned to these taxonomies? How much are they really sustainable in practice? And this data is then taken into account by asset managers, banks to screen their portfolios, loan books, and assess the overall sustainability of how they've allocated their capital. So it's an indicator of where you stand today in terms of sustainability. And by measuring it, you can also know how to improve it over time. how to reach those thresholds for the next 30 years and help your activities to become more and more sustainable.

Then I think you're at the right festival today because the whole week was around sustainability. Do you see, like you earlier said, that Singapore is now heading towards a taxonomy as well? Is this like similarities? Are we like from the ground up building a system which is the same everywhere, interoperability as they call it nicely? Indeed.

So Singapore, the MAS, with Project Greenprint, is really one of the most advanced ESG fintech ecosystems in the world. And taxonomies have a lot of similarities. I would say roughly 60% of the components of these international taxonomies is the same. It's the same logic, but you still want to have local specificities because economies are different. The level of development of all countries are different, so there's different priorities. And hence the idea for us is, well, going to a country, codify this national taxonomy into the infrastructure.

Mm-hmm.

Take into account the local specificities, create equivalence tables with what's done in other countries, other jurisdictions, and enable the local financial industry, the issuers, the banks, asset managers to perform the reporting, generate the data, and share with other international capital markets. So we create these bridges between all the infrastructures we've set up across Europe, the UK, South Africa, and other regions and help this data flow. And that means, for example, a Singaporean issuer would submit the data under the Singapore taxonomy, and we will then match it to the European framework so that a, for for example, Irish asset manager would be able to understand this information and then take their investment decision and vice versa.

Yeah, because at the end of the day, we don't want to be greenwashing. Now, earlier in your, your answer, you said we, and I maybe didn't ask you in the beginning, but when you say we, what does it stand for?

Well, Greenomy is now a team of 65 people. Wow.

Growing fast?

Absolutely. Very fast. So based in Brussels, the headquarters in Belgium, but half of the team is across Europe and 5 international locations, and one of them is here in Singapore. Now, we are a team of sustainability experts, financial experts, engineers, data analysts that have set up this infrastructure. But we're very lucky that we also have some very important strategic partners and shareholders behind us. And one of them is, is Euroclear. the international financial market infrastructure. So Euroclear came into our capital in January and they're now helping us scale and this infrastructure, bring in their own network and creating, you know, the credibility and reference as an infrastructure for ESG. And we now have set up also a user committee of all the different banks and major players that are using our infrastructure. so that they can also help together shape the infrastructure, what exactly needs to be developed further, whether it's in Europe or all the other jurisdictions where we're present.

I think— congratulate me— I'm not thinking, I'm 100% sure. Congratulations with that collaboration with Euroclear.

Thank you.

Because I got fascinated by you when we met the first time, when you said the words user-owned, user-governed. And that for me sounded immediately like Euroclear. Maybe can you explain what does that mean and what does that mean actually for Greenomi?

So that means, you know, we're talking here of climate change, okay? And ESG data should be freely available because it's one thing to get the data, do the reporting compliance, but at the end of the day, all of this is set up to keep improving your sustainability, make a transition. And so That's why our goal is to create an infrastructure and bring in connectors that can then distribute it further to their own networks. Instead of having multiple solutions in their corners, we bring everyone together. That's how we have a global alliance now with Deloitte, partnership with Ecovadis, the leading ESG software. We have a partnership—

Yes.

Announced yesterday in Germany with Schufa, the German credit bureau. where they're going to go to their network of 10,000 corporates and then bring in the German banks on board. So you have, you know, a whole economy, a whole German market coming in through these partners. And so by being a user, having users commit to user owners, the idea is to bring these parties together, work together on the same topic, mutualize the efforts, reduce the costs. At the end of the day, the compliance cost of this legislation in the EU alone is €2.5 billion.

a lot of money.

And with digitalization, you can reduce it and make it accessible to all. Sustainability reporting should be democratized, vulgarized. That's our key mission. And with the data, then allow all these players to think how they can allocate their capital towards those projects that are most sustainable and then accelerate the transition. And that's really when I started Greenomy. That was the key goal is I saw these 650 pages of legislation. I said, That's fantastic. But in practice, how will it work? And so bringing digitalization tools to facilitate its implementation, not waste any time with the little time we have to, you know, save the planet and then bring everyone together and work towards this common mission.

A very personal question, Alex. When do you sleep?

Well, with the jet lag, very, very little here, but I'm very fortunate to have a very competent team. And we're all working very hard. At the same time, we're driven by this mission. You know, we, we're motivated by the fact that things are going very well and we're growing. But we're working quite good and we have partners helping us out. And it is intense, but at the same time, the mission is worth it. And so we'll keep going and we'll keep pushing.

Yeah, I'm glad you say that. I was also in a panel earlier this week around ESG and Well, the discussion almost started to go in like a technical discussion, and I kind of brought it back like, ladies and gentlemen, we are saving the planet. This is our mission. I mean, it should justify everything that we do, right?

Indeed.

Now, you said you have been traveling like all these Asian countries and meeting a lot of people, and you say already there's some slight differences. But maybe coming back to being here today at the Singapore FinTech Festival, What has struck you? What was your first impression?

Oh, first of all, it's probably one of the best fintech festivals I've been at. It's certainly the biggest one. The key here is there is an entire section here dedicated to ESG fintech under the Project Greenprint initiative. And what Lionel and his team have established here in Singapore as an ecosystem is unbelievable. And this is definitely an inspiration. I'm also here coming to see what's being done and what we can learn from and how we can collaborate. And so you have here half a hall full of ESG fintechs from here in the region, but also internationally together working towards the same mission. And, and that's really certainly what amazed me most.

Makes sense. It also did something to me also. Well, we're closely to the end of this podcast, so if there would be like one advice that you could give to the listeners, and maybe also I'm helping you a little bit, well, if they want to know more about Greenomy, maybe that should be in your advice too.

My advice, first of all, is we started little, you know. Um, but the key is also the mission you select, you know. If, if you go ahead, launch your, your project, think about a mission because the mission will bring motivation, energy. Uh, we— I'm very lucky, the core team I started with, you know, we were— difficult days, we pushed through. But also we found very good partners that trusted in us very early and they helped us move forward. And that's also what explains how fast things have done—

gone.

done for us. So pick the right mission and you have many. There's not only climate change, there's many other challenges. And so, you know, dedicate your time, your resources towards that and it will help you go forward. And, you know, as we're expanding, we're obviously looking for more talent to join us.

Mm-hmm.

Greenomy, we have a website, we have a blog, we also have a Greenomy Academy that is there to train people about sustainability, sustainable finance. And it's all about vulgarizing, democratizing this sector. So if you're interested, please feel free to reach out and we'd be happy to, to talk with you.

Excellent. And definitely an extension to the audience. And thank you so much for these inspiring words, Alex. Thank you for joining me. I know you're very tired because of all the traveling and all the hard work you're doing, all that for the bigger cause being net zero one day. So thank you so much. Thank you also to the audience. Thank you for tuning in and please stay tuned because more fintech news will come straight from Singapore FinTech Festival. Thank you.

Thank you very much. Thank you to The Connector.

You're welcome.

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