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Empowering sustainability through everyday payments

Global Trends
5 Mins.

Banks and other payment card issuers have the opportunity to support customers’ aspirations to tackle climate change by providing them with tools that track, reduce, and offset the carbon footprint of their day-to-day purchases. Armed with the knowledge of the CO2 emissions behind purchases, they can individually take action by making more sustainable buying choices or – where that is not possible today – by neutralizing their impact.

There is a growing, society-wide consciousness that everyone needs to play their part in dealing with climate change. Alongside the actions of policy-makers and companies, the individual behavior and daily choices of consumers will have a major influence – and a direct impact – on cutting carbon emissions.

Consumers are already making day-by-day, ethical judgments on which companies and financial institutions they engage with, in many cases choosing to channel their spending power and business relationships towards organizations with genuine commitments to climate action.

At the same time, many people would like to infuse climate action into their own economic activities. They are looking for opportunities to both decarbonize purchases as much as they can and, when that is unavoidable, to compensate for the CO2 emissions these generate.

Such choices, of course, have significant implications for business. A study by the NYU Stern Center for Sustainable Business found that revenue for products that are marketed as supporting sustainability grow 5.6 times faster than products marketed without that attribute.1

And two-thirds of respondents to a McKinsey & Company survey said that they consider sustainability when they are making a purchase.2

But to take responsibility for their actions, individuals and businesses need information – above all, trusted insight into the carbon impact of their day-to-day activities. Such visibility can help them to both make a judgment on how they could positively modify their behavior in order to lower their carbon footprint, as well as to decide on the retailers, logistics firms, financial institutions, and other organizations they wish to engage with. And that’s a place where banks and other card issuers can play a pivotal role.

Extending the sustainability journey of the payment card

As the backbone of commerce and investment, banks are already driving change on carbon emissions on multiple fronts. They are actively aligning business decisions and investments towards the support of greener business models. And, increasingly, they’re engaging in fast-evolving networks of eco-innovative services, with the aim of taking their payment card portfolios down a more sustainable path. 

With the help of trusted partners such as G+D, they are making the bold switch to sustainable materials for the cards they issue to customers.

Banks and other card issuers are also seeking out reliable partners that can craft tools that help customers understand the details of their carbon footprint on day-to-day purchases – and offer them the option of offsetting those. Among industry leaders, it’s a hot topic.

“Customers’ daily activities today will affect the planet for future generations to come. So, providing visibility into the impact of those activities can have a huge impact when the potential is applied to individual transactions at scale,” said Dr. Carsten Wengel, Head of Sales and Distribution for G+D’s Cards and Digital Payment Business, at the 2022 European Payments Conference.3

And the opportunity is there for financial service institutions to embrace that vital role, said Wengel. “They can be the drivers of sustainable finance and act as intermediates that support an entire society towards a more environmentally friendly ecosystem.”

Putting payment cards at the heart of a sustainability ecosystem

Globe Convego Beyond card Giesecke+Devrient
Eco-innovative payment solutions

By actively building an ecosystem of partners, G+D is putting banks and other card issuers in a position to empower their customers to both monitor and address personal CO2 impacts – and, in turn, to help to offset the organization’s own carbon footprint. Two early enablers in that G+D ecosystem are already on board: sustainability tech innovators Doconomy and Patch.

For banks that have already started providing sustainable payment cards to customers as a daily reminder of the importance of eco-friendly behavior, there is the even greater opportunity to elevate the focus to a comprehensive eco-card program. By partnering with Doconomy, banks can provide that all-important visibility into the carbon emissions of consumers’ purchases, empowering them to monitor the impact of their own buying patterns, and change their behavior based on the carbon impact they observe.

Patch’s technology complements the emissions estimates with a clear step towards climate action by providing the ability to purchase trusted carbon credits. By leveraging both of these features, banks can help their customers calculate the environmental impact of their      purchases, and quickly take action to compensate for that impact through an integrated, seamless experience right within their banking app.

For example, purchases shown in a mobile wallet can be accompanied by a calculation of their associated CO2 emissions. Buying a pair of sports shoes at around $90, for example, is on average estimated to generate 24 kg of carbon emissions. A short $17 journey in a ride-hailing taxi is estimated to produce 9 kg of carbon emissions. Users can see these amounts right next to their purchases.

The direct link to Patch’s digital marketplace of carbon credits then takes the customer to the next level of climate action. The platform empowers card issuers to invest in fully verified carbon credit projects (both nature-based and human-engineered solutions), enabling them to offer customers the opportunity to offset the carbon footprint generated by each purchase. Banks and issuers facilitate that by investing, on customers’ behalf, in certified ecological action programs, such as direct air capture or large-scale tree planting, and then provide access to those for customers.

Awareness of such calculations can encourage behavioral change, for everyone’s benefit, said Wengel. “It’s a general truth that changing behaviors is very difficult. Making people aware of the impact their behavior has on the planet is a great starting point. I’m a firm believer in the management theory that you can only manage what you can measure. And being able to assess and manage personal CO2 footprints is going to have a great impact going forward.”

“It is crucial for the finance sector to implement new business models that can empower and support their customers to make greener choices.“
Dr. Carsten Wengel
Head of Sales and Distribution for Cards and Digital Payment Business at G+D

In essence, by adding Patch and Doconomy to their banking apps, a financial institution can empower customers to take positive action on their carbon footprint. However, like action on climate change, this should not be a wait-and-see decision.

“There is a window of opportunity for banks and card issuers to win customers, especially among younger generations, who want to contribute to a sustainable future. So, it is crucial for the finance sector to implement new business models that can empower and support their customers to make greener choices,” said Wengel.

Championing emissions reduction

What is abundantly clear is that change at every level is necessary. According to The Nature Conservancy, to have the best chance of avoiding a 2°C rise in global temperatures, the average individual global carbon footprint per year needs to drop below 2 metric tons by 2050.4 To put that in perspective, the average annual carbon footprint of an Australian is 17 metric tons, and that of an American is 16 metric tons.5

The G+D and Patch partnership also helps support financial services organizations to achieve their carbon reduction and offset targets with maximum impact:

  • It helps banks with the challenges they encounter when working to take major steps towards achieving net-zero targets (challenges such as institutional limitations on human capital and legal resources)
  • It enhances their brands by showing them as genuine contributors to positive action on climate change – important, as an increasingly large number of younger consumers say they choose brands that help them live more-sustainable lifestyles6
  • It adds a compelling capability to their banking apps, a real differentiator in a crowded market
  • It builds trust and transparency by ensuring customers have access to trusted carbon credits that are fully verified.    

The ambition behind the G+D ecosystem stretches further, though. “We have an opportunity at G+D to enable the financial service industries – who are managing transactions by the billions – to incorporate solutions into their services that make CO2 footprints highly visible, and to introduce certified programs for offsetting those emissions. Our digital solutions can be a daily reminder to customers that they and their bank are enablers of action on climate change,” said Wengel.

  1. NYU Stern Research: Actually, Consumers Do Buy Sustainable Products (Harvard Business Review)

  2. McKinsey & Company: The State of Fashion 2020

  3. Sustainable Payment: The New Eco- and Purpose-Driven Consumer (0:33:47–1:33:22)

  4. The Nature Conservancy

  5. Where in the world do people emit the most CO2? Our World in Data

  6. 88% Of Consumers Want You To Help Them Make A Difference

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