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Hurricane Category Six Considered by Scientists – Here’s how Fintech can help stop the seventh.

The traditional five-category Saffir-Sampson scale for measuring hurricanes may not show the true power of the most destructive storms, scientists claimed in a paper published earlier this month

The research is a telling reminder that climate change, and the resulting increases in global temperature and extreme weather events, are not standing still and remain the single greatest threat to human development.

However, sustainable initiatives are cropping up across a wide range of industries, each linked by one key change-maker: fintech.

Sixth Category for Hurricanes Gaining Momentum

Introduced in 1970, the Saffir-Simpson scale ranks storms within five categories defined by wind speed. Category five storms, the highest current category, have winds of over 157 miles per hour (MPH), leading to an increased rate of destruction for land masses in their path. The addition of a sixth category, including storms with winds of over 192 MPH, would enable emergency services and civilians to better prepare for the most extreme weather events.

Storm categorisation is a hot topic in at-risk communities as five storms which would qualify for category six were recorded in the last ten years. The authors of February’s paper, James Kossin and Michael Wehner,  expect the frequency of these super storms to increase steadily over the coming decades. When Kossin and Wehner ran climate models with a global temperature rise of 2 degrees Celsius, the risk of category six storms doubled in the Gulf of Mexico.

The ongoing hurricane categorisation debate is yet another of the abundant reminders that the harm caused by humans to the environment will be returned to us, whether that’s water scarcity, desertification, or extreme weather events. 

Industry is Stepping Up to the Challenge

The outlook for the environment is not all doom and gloom. Chile became the first nation to ratify the Biodiversity Beyond National Jurisdictions agreement earlier

this year, a significant step for one of this decade’s key ecosystem protection initiatives. 

There’s also a positive shift unfolding in the private sector. Driven by regulatory efforts, such as the EU’s latest ESG ratings deal, and consumer demand for net-zero products and services, companies are scrambling to integrate emission tracking and mitigation capabilities throughout their organisation. However, allegations of greenwashing caused by difficulties in reporting and the opaque voluntary carbon market have warded off institutions seeking to increase the sustainability of their operations.

 

Fintech has the Tools to Enable a Green Revolution

The fintech industry has emerged as a powerful partner for businesses transitioning to a sustainable business model. By leveraging their experience in building open platforms and API-friendly infrastructure, fintechs are increasing transparency in the emissions mitigation market, enabling genuine ESG initiatives to stand out. 

Carbon credits are a crucial tool in moving towards a net-zero economy, enabling providers of emissions-producing businesses to address their impact on the environment without significantly disrupting their operations. Innovative fintechs are increasing the accessibility of the voluntary carbon market, enabling organisations to efficiently buy and sell carbon credits and foster demand for net-negative emissions projects. Fintechs are building more robust secondary markets to enable companies to meet compliance requirements, enabling businesses to trade carbon allowances with each other, creating a new avenue for emissions mitigation and incentivising businesses to invest in emission-reducing initiatives.

In addition, fintechs are creating new markets for sustainable action, including green bonds and carbon credit-linked financial products, which attract more investment into carbon removal projects. The driving force behind fintech, digital transformation, is also a powerful force in reducing emissions. The industry is hard at work onboarding institutions to the cloud, moving technical infrastructure across the banking, payments and other technology-heavy industries from legacy servers to centralised and efficient data centres, reducing emissions.

As the effects of climate change continue to unravel around the world, we’re reminded of the urgent challenge ahead of us to achieve net zero. Fintech can play a key role in that process, making carbon credit markets more efficient and accessible, introducing new financial markets which spur carbon removal projects, and enabling digital transformation. It might just be the key to avoiding a seventh category of hurricane categorisations, and a world of climate change-related troubles.