Harnessing the pace and scale of climate innovation
It’s the most wonderful time of the year, almost. November ushers in the latest COP summit, where governments, brands and other interested parties will gather in Dubai to assess the progress made in dealing with climate change and discuss future solutions.
It’s an enormous challenge that faces the global community or as Mark Carney, former governor of the Bank of England and UN Special Envoy on Climate Action and Finance, declared at Davos this year, “We need an energy transformation on the scale of the industrial revolution at the speed of the digital transformation. And therefore, we need a revolution in finance.”
At the heart of this rapid transformation is carbon. From energy to transport, travel, and even our current systems of production, everything's getting a green makeover. As we all become more eco-conscious, businesses are racing to meet our demands for greener options that are embedded in exiting products. And governments are getting in on the action too, backing these eco-initiatives with subsidies, investments, and regulations.
The Power of Three: Consumers, Businesses, and Governments
Let's break down the green shift happening across the three main pillars of society:
- Consumers: According to global research in 2020, Nearly 9 in 10 people wanted a more sustainable and equitable world post pandemic.1
- Businesses: There's a desire amongst SMBs to be more sustainable, but they need help.
- Governments: Investment is being poured into energy and transport, driving forward this transition to a greener future. This is paired with regulations that all medium and large companies measure their emissions including their scope 3, which will also impact a lot of the small companies that work with the large companies and anyone that does business in the EU.
These shifts are happening right now, and they're affecting everyone. In this time of disruption, we're all looking for ways to make life more convenient, lower costs, and decrease risks. Territory that’s familiar for Visa’s main clients, the banks.
How Climate Innovation Empowers Change
This green revolution isn't just happening in one industry; it's happening everywhere. Energy, automotive, mobility, mortgage lenders, governments - they're all experiencing a seismic shift. And it's not just about being green; it's about redefining commerce, which itself is going through huge changes, especially since the pandemic, as we move from hundreds of millions of sellers – large and small – to billions of sellers around the world. Technology has enabled anyone to be a seller and companies need to keep up to provide services at scale to reach these sellers and help them flourish.
Or take the mobility sector – this is not new news if you work in the transport industry, but the scale and speed of change in mobility has been transformative. Taken by themselves they are interesting sector shifts, but when you combine decentralisation of power generation, sharing of that energy, storing that energy in a moving vehicle, trading of that energy at difference prices, and seeking to maximise your energy capacity potential with changes to your home via financing in order to make a return. As you follow the energy movement, you can see the money movement, both in capital and in flows.
Despite the obvious need for urgent action and progress, things are still moving slowly. Some of this is in part a change story, all of us likely remember how long it took to move to contactless, when in hindsight it seems obvious now, there were very real technical issues to figure out, but most of it was who goes first, how to get the fly wheel going, and get to that critical mass that adoption became obvious, we had reached a tipping point.
Collaboration and Climate Tech
Europe is leading the way in climate fintech innovation and Visa is at the forefront of this transition. Collaboration is absolutely crucial and our various partners help to further scale our reach and provide complementary products and services to ensure we meet consumers’ demand greater convenience and choice.
ecolytiq, our inaugural FinTech partner, is a climate engagement platform that helps banks and financial service providers channel customer demand for climate action into positive impact for both the environment and business growth. ecolytiq enriches traditional banking with embedded transaction-based footprinting, personalised climate insights, and access to climate positive initiatives.
Last year Visa partnered with Plan A to drive more sustainable economic transformation of businesses at a global scale. The alliance saw Visa offering the Plan A Sustainability Platform, a leading corporate carbon accounting, decarbonisation, and ESG reporting SaaS solution, as part of its Fintech Partner Connect programme to Visa’s issuer network.
Utilising smart data within a global ecosystem
A large network model like Visa can rapidly scale ideas where there is shared value for our clients and partners and for the individuals and businesses we serve. That could be through helping governments optimise their urban mobility networks, embedding sustainability services into consumer and small business banking, developing new commercial models for the circular economy or even helping mid-to-large corporates prepare for the requirements of regulatory compliance and reporting.
Technology wields immense power in fostering a green transition, enabling direct links and information exchange with consumers, as well as learning techniques via AI. Visa is building the crucial infrastructure to better estimate consumer behavior and empower shifts towards more sustainable options, encouraging and rewarding more sustainable choices.
With consumers and society playing a significant role in carbon emissions, it’s essential to empower people to support sustainable consumption and reduce the attitude-action gap. Following spend can provide rich insights into how to reduce the environmental impact of individuals and showcase the clear business case in empowering consumers towards more sustainable choices.
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1 World Economic Forum, 2020: https://www.weforum.org/press/2020/09/nearly-9-in-10-people-globally-want-a-more-sustainable-and-equitable-world-post-covid-19/