Greener bank cards can help sustainability push

It has been five years since the United Nations launched its 17 sustainable development goals (SDGs), with the aim of providing a blueprint for a more sustainable future by 2030. In common with businesses in other sectors, many banks promised to take action in a range of areas, from reducing poverty to improving gender equality. Netherlands-based ING, for example, promised to focus on promoting climate action, sustainable consumption and production, and sustainable and inclusive economic growth.

In September 2019 a number of banks went further, agreeing to adopt new UN-backed climate and sustainability principles. The signatories to The Principles for Responsible Banking, which has grown to 199 financial institutions worth $53 trillion, committed to strategically aligning their businesses with the goals of the Paris Agreement on Climate Change alongside the UN SDGs.¹

Insufficient progress

So, how are things progressing? According to UN Secretary-General António Guterres, “global efforts to date have been insufficient to deliver the change we need, jeopardizing the [Sustainable Development] Agenda’s promise to current and future generations.”² Redoubling efforts to ensure change does happen is particularly important in light of the COVID-19 pandemic, Guterres noted. 

Given the vast scale and ambition of the SDGs, it can be difficult to know where to start, but opportunities do exist to make a positive contribution. Take payment card issuance programs as an example. There are around 20 billion payment cards in circulation worldwide, many of which are made from a type of plastic called PVC, due to its durability and cost-effectiveness. Although lightweight, these credit, debit, and prepaid cards do contribute to the roughly 400 million tons of plastic the world currently produces every year.³ Worryingly, it is estimated that just 9% of this plastic is recycled, meaning that the remainder is sent to landfill, burned, or discarded, thereby polluting the planet.⁴

A business imperative

Moving to payment cards that are more environmentally friendly is important not only for banks looking to meet their SDG-related obligations – they are a business imperative too. Although trust in banks and financial services companies rose in the first five months of 2020, these organizations are still towards the bottom of the “Edelman Trust Barometer,” a ranking that compares how consumers of all ages around the world trust different sectors.⁵

One of the most important demographics that banks need to ensure trusts them is Generation Z. Given that Gen Zs were born from the mid-1990s onwards, they are now entering the workforce, and for banks they represent the bulk of their immediate and future customers. According to one recent study, 90% of Gen Z believes companies must act to help social and environmental issues, and 75% will do research to see if a company is being honest when it takes a stand on issues.⁶ It is clear that banks need to evolve to remain relevant. As competition from new, digital-first players intensifies, it is no longer a question of whether it is necessary to act, but of how to act. Embracing green payment cards and associated issuance processes is one way banks can start walking the walk on sustainability issues.

Published: 15/12/2020