From Aspiration to Action: Embedding Sustainability in Everyday Payments
Every purchase we make has two costs: one to our finances and one to the planet. The payments sector has always focused on the first. However, changing priorities mean that tools such as carbon footprint calculators and guided action are now a must-have for cardholders, businesses and the environment.
Illuminating the link between spending and sustainability
It is not easy being green: the number of moving parts is overwhelming. Research from Visa1 reveals that consumers want card providers’ help. They want to see the impact of their spending and ‘solutions not sacrifice’ – eco-friendly tools embedded into everyday services.
Visa and its partners are innovating to help financial institutions answer these demands. A new wave of banking features can, for example, show consumers the carbon cost of individual transactions, share hints and tips, and allow donations to environmental causes.
“Our clients are increasingly interested in embedding sustainability into their businesses. This is matched with increasing interest from climate-conscious consumers who want a more sustainable lifestyle but don’t know where to start", explains Otto Williams, Head of Products, Solutions and Partnerships for Central and Eastern Europe, Middle East and Africa (CEMEA) at Visa.
Helping consumers bridge the aspiration-action gap
ESG (Environmental, Social and Governance) factors influence not only what consumers buy but also the services they use, including banking. However, while 71% of consumers are more likely to choose a bank with a positive social and environmental impact, only a quarter of consumers have sustainability features on their cards2. There is a significant opportunity, therefore, for the financial institutions that can bridge this aspiration-action gap.
“Every industry must ask what role it can play in saving the planet. The payments sector has the power to educate consumers on their carbon footprint and drive behavioral change. It is our duty to put this to good use", says Otto Williams.
Helping companies quantify their ESG credentials
Consumers are not alone: a wide range of stakeholders – from regulators to shareholders – have elevated ESG from a nice-to-have to a hard requirement. In addition, top-down regulation is increasing as governments push business to meet climate targets.
This poses a problem. How do companies prove progress in this area? Exaggerate and stand accused of greenwashing, get it wrong and risk a regulatory fine. The answer is data - quantifiable proof that a company is reducing its carbon footprint and enabling others to do so.