The key players driving the crucial Fintech Summit Latam 2024 debates have their space here. We had the pleasure of hearing from Alexander Lempka, Founder and CEO of Connect Earth, who will be at the Fintech Summit Latam presenting the functioning and reach of his innovative product to Latin American audiences.
Environmental sustainability is becoming a key factor for investors, corporate reputation in all industries; and it is also a relevant factor for consumers. Financial sector companies are included in this changing era; hence the importance of the role of the tool developed by Connect Earth.
Alexander Lempka has a history in the financial sector. In university, he launched his first venture, a localization agency focused specifically on fintech. He worked at the first fintech to go public on the SGX in Singapore; and for several years, he worked as an independent consultant for a variety of startups, and discovered a passion for social impact.
In 2021, he co-founded Connect Earth, combining his experience in finance with his passion for sustainability, because he has always believed that the fintech space is the perfect platform to reach consumers and businesses, and thus increase awareness and education on important issues such as climate change.
Frecuencia Money: In Europe, banks are committed to environmental issues (at least from their marketing strategy). And in Latin America?
Alexander Lempka: In Europe, there are already regulations that require institutions of a certain size to report their emissions and take responsibility for their environmental impact. In Latin America, although the regulations are under development, we have observed that countries like Mexico, Colombia, and Chile are at the forefront.
Frecuencia Money: What kind of initiatives?
Alexander Lempka: Banks in these countries, on their initiative, have adhered to international commitments to decarbonize their portfolios and are leading the way in educating and implementing ESG (environmental, social, and governance) policies. These initiatives not only reflect a voluntary commitment but also set a model to follow for other financial institutions in the region.
How CONNECT EARTH works
Frecuencia Money: Could you explain how the Connect Earth API works and how it helps companies and consumers track their carbon footprint?
Alexander Lempka: Our API empowers banks to offer their customers the visualization of the carbon footprint of each purchase they make, and provides tips to reduce their impact without reducing spending. We take all the transactions that customers make daily and convert them into an estimate of CO2 emissions taking into account information about the type of product, amounts, inflation, and emission factors. We use our proprietary Artificial Intelligence model, Climate Expert 1, to categorize and have more data coverage.
Frecuencia Money: What kind of financial data does your API use to calculate the carbon footprint?
Alexander Lempka: We take into account transaction information, accounting, and tax data. Currently, 250,000 users are using the Connect Earth product.
Environmental awareness: cause and effect
Frecuencia Money: Could you give specific examples of how companies are integrating this API into their operations?
Alexander Lempka: We have processed billions of transactions for our clients worldwide. I can give you the example of KBC Bank in Bulgaria, which has implemented our tool to generate awareness of the climate impact of its retail customers. Emissions, equivalences, and recommendations to improve impact were implemented; and in a first instance, 3 million kg of CO2e per month were reduced (which is equivalent to taking 21,408 cars off the road). This client also saw improvements in its NPS (a tool that proposes to measure the loyalty of a company’s customers based on recommendations), app penetration, and notification opening, all while meeting its environmental objectives.
Frecuencia Money: What feedback have you received from clients in the financial and corporate sectors about the product’s impact on their sustainability efforts?
Alexander Lempka: The banking sector in Latin America believes that sustainability is a very interesting opportunity. Last week, the CEO of Bancolombia expressed that the region must continue to grow but take care of the environment, through the measurement and capture of carbon. The Product Manager of BBVA also expressed that they have doubled their green portfolio in the last two years.
A sustainable future in Latin America
Frecuencia Money: What are the plans for the future of the company?
Alexander Lempka: We have many projects underway in Europe and the Middle East. Our goal is to continue growing in those regions and forge strategic relationships with our clients to support them on their path to decarbonization. In Latin America, we are pioneers in the market, we have the knowledge and all the infrastructure to scale together with our clients. Soon we will be announcing projects that will be launched next year.
Frecuencia Money: How do you imagine the role of environmental data in the financial sector will evolve in the coming years?
Alexander Lempka: I foresee that the role of environmental data in the financial sector will become increasingly crucial and multifaceted. As awareness of climate change and sustainability continues to grow, both regulators and consumers will demand greater transparency and environmental responsibility from financial institutions.
Frecuencia Money: What advice would you give to other entrepreneurs in Latin America who are looking to create technological solutions for environmental problems?
Alexander Lempka: The main advice is to really understand in which industries the regulations will be applied first. With COP30 and COP16 in Latin America, many industries will begin to measure their environmental impact. With that movement, opportunities will arise to help companies measure, assess risk, and reduce emissions.