While global sustainable funds recorded historic outflows in 2025, the fintech sector is quietly decoupling from the broader market trend.
Rather than retreating, financial technology leaders are doubling down on sustainability, not through passive investment vehicles, but by embedding ‘GreenOps’ and carbon accountability directly into their operational DNA.
From internal carbon taxes to bespoke institutional mandates, 2026 marks the shift from performative ESG to structural efficiency.
The 2025 Outflow Paradox
To the casual observer, the data from late 2025 suggests a collapse in sustainable finance.
According to Morningstar’s Q4 2025 Global Sustainable Fund Review, global sustainable open-end and exchange-traded funds saw an estimated US$27 billion in net outflows in the final quarter of the year. This followed a bruising Q3, which witnessed nearly US$55 billion in withdrawals.
For the full year of 2025, global sustainable funds recorded US$84 billion in net outflows, a sharp reversal from the US$38 billion in inflows seen in 2024. However, headline figures often obscure the nuance of market mechanics.
Hortense Bioy, head of sustainable investing research at Morningstar Sustainalytics, explains that the exodus is not a complete abandonment of ESG principles but a restructuring of capital deployment.
“The ESG fund‑flow picture doesn’t look good, but the figures are somewhat skewed by large European institutional investors reallocating assets from pooled ESG funds into custom ESG mandates,” Bioy notes. “Nonetheless, the wider environment remains challenging, as persistent headwinds, including geopolitical tensions, the ESG backlash, regulatory backpedalling, and mixed performance, continue to weigh on investor appetite.”
The Shift to Bespoke Mandates
The narrative of “abandonment” fails to account for the sophistication of institutional investors in 2026. Large UK pension funds and asset managers are moving away from off-the-shelf, pooled ESG products, which are often accused of greenwashing or poor alignment with specific impact goals, toward “bespoke mandates.”
These custom strategies allow investors to exercise greater control over their portfolios, ensuring alignment with specific net-zero targets or exclusion policies that generic funds cannot offer. This migration explains a significant portion of the Q4 2025 redemptions.
Capital is not leaving the sustainable ecosystem; it is moving into more specialised, accountable vehicles that demand higher data fidelity, a requirement that fintechs are uniquely positioned to service.
GreenOps: The New Efficiency Frontier
While capital markets adjust their vehicle preferences, the operational side of fintech is witnessing a revolution under the banner of “GreenOps.” In 2026, sustainability is no longer a PR expense but a driver of infrastructure efficiency.
“Our latest research into global technology leadership shows that 94% of organisations with mature management practices report improved efficiency and performance,” says Justin Mann, Head of Standards, Research & Education at the TBM Council.
Mann argues that the operational rigour applied to financial budgets is finally being applied to carbon: “In 2026, we are seeing this play out in the fintech space through the adoption of GreenOps, where sustainability targets are now driving better infrastructure efficiency than traditional cost-cutting efforts. By using the modernised TBM Framework, along with the latest Taxonomy 5.0 standards, fintechs can move past the ‘guessing game’ and start measuring carbon with the same rigour they use for their actual budgets.”
Standardisation and the TBM Framework
The challenge for fintechs has historically been the lack of a unified language for carbon attribution. The “black box” of cloud computing often obscures the true environmental cost of a digital transaction.
Jack Bischof, General Manager at the TBM Council, highlights the role of community-driven standards in solving this: “The convergence of management disciplines is critical to ensuring we keep pace with a fast-changing landscape. Through our Open GreenOps community, we are standardising how organisations attribute Scope emissions across the entire technology stack, ensuring every tech investment is measured by its value to the business and its impact on the planet.”
This standardisation involves collaboration with specialised partners. “Through our collaboration with partners like SustainableIT.org, Posetiv, and GreenPixie, we seek to ensure that carbon-awareness becomes a measurable factor within a firm’s financial model, with KPIs across the entire tech stack,” Bischof adds.
Infrastructure-Optimised vs. Cloud-First
For the past decade, “cloud-first” was the mantra for fintech scalability. However, as the IEA projects global data centre electricity demand to double by 2030, blind cloud adoption is becoming a liability. Fintech CTOs are now pivoting to “infrastructure-optimised” strategies.
Matthew Guarini, Executive Director at the TBM Council, describes this shift: “We are advocating for a shift from a ‘cloud-first’ mindset to an intelligent, ‘infrastructure-optimised’ approach driven by defined business needs. Through ‘TBM by Design,’ organisations proactively embed environmental and financial insights into the architecture phase, allowing agents to autonomously route workloads to data centres with the lowest carbon intensity in real-time.”
This approach also addresses the issue of technical debt. Guarini notes that this strategy allows leaders to “use Framework 2.0 Taxonomy 5.0 to ‘harvest’ energy-hungry legacy systems, essentially pruning the old to fund the new.”
Case Study: Klarna’s Internal Carbon Tax
One of the strongest examples of defying the pullback trend is Klarna’s approach to internal carbon pricing. Rather than relying on cheap, questionable offsets, the payments giant has implemented an internal carbon tax of US$200 per tonne for Scope 1 and 2 emissions (and US$100 for Scope 3).
By the start of 2026, this strategy had helped Klarna reduce its greenhouse gas emissions by 43% compared to 2022 levels. The funds generated from this internal tax are not returned to the bottom line but are funnelled into the Climate Transformation Fund.
In 2025 alone, this fund deployed US$1.25 million to “moonshot” projects, including carbon capture from seawater (BluShift) and underground storage of carbon from invasive plants (Carbonsate). This model demonstrates how fintechs can create self-sustaining financing mechanisms for climate innovation, independent of external fund flows.
Moonshots Over Offsets
The move away from traditional offsets is part of a broader trend among elite fintechs. Stripe, through its Frontier Climate initiative, continued to aggressively pre-purchase permanent carbon removal throughout 2025.
In early 2025, Frontier facilitated significant offtakes, including a US$31.6 million waste-to-energy deal with Hafslund Celsio and a US$30.6 million direct air capture agreement with Phlair.
By aggregating demand from thousands of businesses using Stripe Climate, the platform effectively acts as a bespoke mandate for small-to medium-sized enterprises, bypassing the traditional fund structures that are currently bleeding capital.
Measuring Carbon at the Transaction Level
The integration of carbon data has moved from the back office to the customer interface. A 2026 report by Accenture notes that 61% of digital-first banks now integrate carbon calculators into their apps, using AI to bridge finance and sustainability.
UK-based Monzo exemplifies this transparency. In its FY2025 reporting, the bank disclosed a carbon footprint of 23,641 tCO2e, with 98.3% stemming from Scope 3 (supply chain) emissions.
By partnering with Watershed for real-time measurement and switching 93% of its card issuance to recycled materials, Monzo provides a granular level of accountability that pooled ESG funds struggle to match.
Future Outlook: From Compliance to Strategy
As the fintech industry moves deeper into 2026, the divergence between public market sentiment and operational reality will likely widen.
The “outflows” reported by Morningstar reflect a market correction, with investors moving away from low-quality, aggregated ESG products. Meanwhile, the inflows into operational efficiency (GreenOps), bespoke mandates, and direct carbon removal technologies suggest that for fintech experts, sustainability has graduated from a marketing slide to a core engineering challenge.
With regulatory frameworks like the EU’s CSRD and California’s SB 253 now fully active, the “guessing game” is over. The winners of the next cycle will not be those with the greenest branding, but those with the most efficient code, the most transparent data, and the discipline to tax their own carbon.