These Sustainable Finance Startups Are Ones to Watch

For years, sustainable finance has been dominated by the same big players—MSCI, Sustainalytics, and a handful of ESG rating agencies. But that’s changing quickly.

A 2023 Morningstar study found that over half of ESG funds failed to beat the market​. Meanwhile, big institutions are pulling back from outdated ESG scores—even BlackRock is shifting toward custom ESG models instead of relying on third-party scores​.

At the same time, a wave of new ESG fintech startups is rising, leveraging AI, blockchain, and alternative data to replace traditional ESG ratings. The market is responding: the global ESG fintech sector is expected to reach $10 billion by 2030​.

So, which companies are driving this transformation? And how can investors take advantage of this shift?

Three Big Shifts

1. Real-Time ESG Data

For decades, ESG investing relied on corporate self-reported data—annual disclosures filled with sustainability claims that couldn’t be verified in real-time. That’s no longer the case.

• RepRisk tracks ESG controversies in real-time using AI, scraping the web for sustainability risks as they happen​.

• GHGSat uses satellites to monitor real methane emissions, rather than relying on corporate disclosures​.

• Planet Labs provides satellite imagery to track deforestation, industrial pollution, and land use changes​.

This means investors can track ESG risks as they happen—rather than waiting for outdated, self-reported sustainability reports.

2. Alternative ESG Data

Instead of trusting company press releases, investors are turning to new data sources that verify sustainability claims.

• Everledger uses blockchain to track ethical sourcing and supply chain sustainability​.

• GHGSat and Planet Labs track actual emissions and environmental damage, not just what companies report​.

This shift puts accountability back in the hands of investors, instead of letting companies control the ESG narrative.

3. Active ESG Investing Models

Most ESG funds today still use passive screening—excluding a few controversial companies while keeping broad indexes mostly unchanged. That’s not driving real change.

But a new wave of ESG startups is pioneering impact-driven investment models:

• KlimaDAO is tokenizing carbon credits using blockchain, creating a decentralized carbon market​.

• CarbonX allows direct investment in carbon reduction projects, so even retail investors can fund real climate action​.

This shifts ESG investing from passive checklists to real-world impact.

Now the question is, who else is driving this change?

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