The Financial Regulation Innovation Lab (FRIL), in collaboration with FinTech Scotland and the universities of Strathclyde and Glasgow, has announced the winners of its latest challenge. Launched in June 2024, the initiative invited fintech companies to address key data and technology challenges to better integrate Environmental, Social, and Governance (ESG) factors into financial services.

Twenty fintechs were chosen to advance their solutions in partnership with ten Industry Challenge Partners. Over a three-month Innovation Process, teams collaborated closely with industry professionals, developing and showcasing their innovations in the field of ESG.

Meaningful impact

Challenge Partners for this initiative included Lloyds Banking Group, Morgan Stanley, Barclays, Phoenix Group, abrdn, HSBC, Virgin Money, EY, Sopra Steria, and Equifax. The participating firms worked collaboratively to identify seven key challenges where innovative solutions could drive meaningful impact.

Eight winners will now receive funding to further develop their proposals, having shown significant promise in tackling the ESG challenges highlighted by the FRIL Industry Challenge Partners:

  • GAIALENS: Greenwashing Analytics Solution enabling investors to assess the greenwashing risk of funds and companies.
  • SCOTT LOGIC:  B Corp focussed on addressing data quality and reliability in greenwashing.
  • SICCAR: Secure solution architecture with a focus on reliability and resilience of ESG data.
  • ESG 360:  An AI-Driven Platform using existing ESG Reports to produce a gap analysis for regulatory compliance that provides full audit capability.
  • CIENDOS: Delivering environmental data that underpins financial flows and validates environmental claims.
  • ESG DISCLOSE: An AI powered platform that offers AI-powered analytics, customised integration, real-time monitoring, and collaborative tools.
  • VERIFOXX: A data query engine enabling Industry to query the dataset of an investee/ borrower/ asset, to gain visibility on verified financed emissions
  • TEXPERTAI: An AI and data analytics platform specialising in social sustainability focussing on human capital, rights, and labour standards within the workforce and supply chains.

Moving forward, these fintechs will continue to refine their solutions with ongoing support and collaboration with industry and the Financial Regulation Innovation Lab

Harness innovation

FRIL is one of 26 transformative R&D projects to accelerate the growth of three high-potential innovation clusters – Glasgow City Region, Greater Manchester and West Midlands – funded with £100m from Innovate UK on behalf of UK Research and Innovation.

This is a new model of R&D decision making that empowers local leaders to harness innovation to drive regional economic growth, help attract private investment and develop future technologies.

Mark Cummins, Professor of Financial Technology at the University of Strathclyde and Lead Investigator with FRIL, said:

“It is fantastic to be announcing the awardees from FRIL’s second Innovation Challenge Call on ‘Shaping the Future of ESG in Financial Services’.

“Well done to all of the awardees, but also to all of the companies that took part in the process.

“We look forward to seeing the innovative products and services that will now emerge from the close collaboration that will continue with the strategic financial services partners who set the challenges. “

Nicola Anderson, CEO of FinTech Scotland, said:

“The response to the ‘Shaping the Future of ESG in Financial Services’ innovation call has been outstanding. The level of engagement from both the fintech community and our Challenge Partners highlights the importance of collaboration in driving meaningful change. We are excited to see how the winning solutions will shape the future of ESG in financial services.”