#Payment Technology

How partnership and behavior shape sustainable banking

Global Trends
5 Mins.

Banks are ideally positioned to effect meaningful sustainable change. The way there isn’t easy, but it is paved with exciting collaborations, enhanced levels of customer loyalty, and the promise of a better tomorrow. At least according to Mathias Wikström, CEO and co-founder of Doconomy, and Ruediger Vogt, Head of Payment 4.0 at G+D.

In early 2020, just before the start of the COVID-19 pandemic, the World Economic Forum published its annual Global Risks Report, identifying the main threats to global prosperity over the coming decade. The top five were all environmental.1

Despite the chaos caused by the coronavirus, climate threats still dominated in the report’s most recent version, released in January 2021.2 The pressure on our society to live more sustainably has never been higher.

Among the unorthodox collaborations that are tackling sustainability is the partnership between G+D and Doconomy, who are seeking to enhance payment solutions via digital sustainability tools.

If the environment were a bank …

In mid-2019, Bernie Sanders famously quipped that if the environment were a bank, it would have been saved already. The statement may hold more than a grain of truth.

“Financial services have been able to develop a high level of efficiency,” says Mathias Wikström, CEO and co-founder of Doconomy – a green fintech company whose service enables users to track their individual carbon footprint. “If we can help banks to direct efficiencies acquired in the banking system to account for the fragility of the ecosystem, we can quickly get to a much better spot than we are in today.”

Wikström is not alone in assessing that innovation at the intersection of finance, technology, and climate is poised to play a vital role in the future of sustainability. A recent Accenture report found that sustainable banking represents a major force in reaching the UN’s Sustainable Development Goals (SDGs).3 “The general public expects the financial services industry to be the catalyst when it comes to achieving the UN’s SDGs,” wrote Accenture’s global sustainable banking lead Christof Innig earlier this year. “They demand transparency and accountability beyond pure economic indicators.”

It is a sentiment with which Ruediger Vogt, Head of Payment 4.0 at G+D, concurs: he notes that environmental issues have already shifted consumer attitudes away from viewing financial institutions’ eco-credentials as a luxury, and toward considering them a necessity. “It’s really a key value proposition that banks not only can drive, but also are driving,” he says.

In forming their partnership, G+D and Doconomy have set out to support sustainably minded banks and financial institutions not only to achieve their sustainability targets, but also to forge stronger customer relationships, by empowering customers to make more-ethical choices. 

Innovative partnership for climate-smart payment solutions

Business people walking through green office district

Making sustainable, long-term change is difficult. As a species, humans are hardwired to maintain “homeostasis,” or the status quo, as much as possible. When confronted with change, most resist – and addressing unconscious behavior might be the easy part.

According to Vogt, the initial 5–15% of sustainable action is relatively simple for companies to achieve, because it is concerned with awareness and education. From there, it becomes increasingly more challenging. This is because being credible comes down to a business’s long-term strategy. “What gets measured, gets managed,” Wikström says. “And if you’re not measuring, it’s very hard to understand if you’re doing a little bit better, or much worse.”

For G+D this has meant adopting a multifaceted approach. At the end of 2020, it became one of 24 German companies to participate in the UN SDG Ambition initiative – a program for companies looking to set ambitious sustainability targets. It also set its own climate goal to reduce direct and indirect CO2 emissions by 25%, and committed to supporting customers, and their clients, in protecting the planet for future generations.

Along the path to realizing these objectives, one thing has become abundantly clear: solving critical environmental issues – such as climate change, resource depletion, and ecosystem loss – is far beyond the capabilities of any individual company. Any business wishing to commit to meaningful sustainable change must prepare to work together with companies large and small, friend and “foe,” in order to go green.

“We want to help users understand that daily choices matter.“
Mathias Wikström
CEO and co-founder, Doconomy

Shaping a more ethical consumer

A fundamental truth lies at the core of understanding – and addressing – sustainability: intentions and actions are not always aligned. Ethical thoughts aren’t always translated into ethical deeds. According to a 2019 report in the Harvard Business Review, 65% of people say they want to shop sustainably, but only 26% actually do.4 Humans have to make thousands of decisions every day. To simplify things, consumption is often guided by habit and convenience.  

In their acclaimed 2008 book “Nudge,” Richard Thaler and Cass Sunstein popularized the concept of nudge theory – that the key to successful behavioral change is often positive reinforcement and indirect suggestions rather than strict mandates. And it is this more empathetic approach that G+D and Doconomy view as pivotal to success.

“Sixty percent of an individual’s carbon footprint is linked to everyday consumption,” Wikström says. “We want to help users understand that daily choices matter.”

In collaboration, they hope to nudge individual consumers to take greater personal responsibility for the planet and to make more ethical choices. With Doconomy’s green banking solution, consumers can clearly see if they are reducing their carbon footprint over time. Nudges toward the tool’s integrated carbon-offsetting options can help boost the positive impact.   

For its part, G+D will recommend Doconomy’s services to banks as part of its sustainable Convego® Beyond portfolio – a growing toolbox for the financial industry to drive green initiatives. “G+D’s footprint in the payment ecosystem, combined with Doconomy services, represents a smart way to join forces for a positive impact through payment,” says Vogt, adding that the partnership also enables banks and financial institutions to reshape and strengthen their customer relationships.

Ultimately, much like a successful partnership, payment is about trust. “It’s at the heart of every financial transaction, which is why we want to focus on that particular moment,” says Wikström. "And present an opportunity for the buyer, seller, and bank to take a greener, more ethical approach, as well as shape new loyalties – driven not by incentivizing more consumption, but by recognizing and incentivizing greater responsibility.”

  1. The Global Risks Report, World Economic Forum, 2020

  2. The Global Risks Report, World Economic Forum, 2021

  3. In banking, sustainability is the new digital. Now what? Accenture, 2021

  4. The elusive green consumer, Harvard Business Review, 2019

Published: 05/08/2021

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