The FinTech Impact Report: Working through the world’s to-do list #FinTechforImpact ‘Impact’ is a regulatory and business imperative If they fail to understand their impact, organisations of all sizes run an increasing risk of losing their relevance in the market Regulations are evolving and today require more than inward-looking environmental, social and corporate governance (ESG) metrics. Companies today must assess and disclose their outward material impact. Directives such as the EU Corporate Sustainability Reporting Directive (CSRD) mandate that large firms and listed small and medium-sized enterprises (SMEs) evaluate and disclose the impact of their operations. This transition in regulations is unlikely to stop at the EU or at listed companies; a voluntary code is already being developed for non-listed SMEs operating in the EU1 and the FCA is consulting on 2 3 UK Sustainability Disclosure Requirements (SDR) as part of its ESG Strategy . Impact matters It’s a regulatory Moving beyond 94%to consumers requirement the ESG ‘tick box’ of consumers are more likely to be loyal to From 2024, companies operating and/or Incoming regulatory policies across the EU a company that is transparent about its located in the EU are required to report and UK require “science-based evidence” of 4 their ESG risks and impact risks. This impact; these include the EU CSRD and the environmental and social impact. includes listed SMEs. 5 Advertising Standards Agency Guidelines. 84%Access to 92%Regulation trickles 9%Few companies finance down to SMEs are ready of companies report incorporating ESG of buying organisations require their of companies assess sustainability “double into business practices has improved small business suppliers to disclose ESG materiality” (i.e. inward company impacts, 6 data, and 97% plan to increase their plus outward impact on the world); a their ability to raise investment funds requirements in 2024. 7 requirement of the incoming EU CSRD. 8 11