The Time is Now: Understanding the Power of Sustainability
Sustainability is more than just a buzzword; it's a transformational force that's shaping our world and will continue to do so for decades. In Europe, the question is not 'if' but 'how' you can seize the opportunity it presents.
Just like digitalisation, sustainability permeates various aspects of our lives and disrupts traditional norms. It becomes profitable to be part of the solution when society sets a clear goal, and costly to remain part of the problem. The momentum is building, with commitments from countries, leading companies, and financial institutions.
The EU's ambitious Net Zero strategy aims to make Europe the first carbon-neutral continent by 2050. This serves as a catalyst for immense changes across industries, societies, and our economic system. Businesses are waking up to the importance of sustainability, moving it from a peripheral concern to a central driver of innovation, growth, and competitive advantage.
In the light of this transformative landscape, businesses today are facing increasing pressure and a multitude of incentives to prioritise sustainability. This comes from various angles and stakeholders, amplifying the benefits of adopting more sustainable practices. These practices are influenced by the following Forces at Play:
• Growing regulatory pressure & mitigating risks, with ever-increasing demands and accountability on businesses, the negative impacts of inaction or greenwashing outweigh the cost of climate action.
• Macroeconomic trends & capital markets show climate-friendly products and services have a competitive advantage and ‘green’ investments are increasingly in demand.
• Social transition where consumers and businesses are seeking out sustainable options, partly to increase customer loyalty and retention, and employees are pursuing more purposeful roles.
• Innovation driven by technology and data where adopting an innovative mindset sets businesses apart from the competition and creating future-fit business models.
Unveiling Sustainability as a Service
In this evolving landscape, 'Sustainability as a Service' (SaaS) emerges as a key component in the payments industry. It refers to the integration of more sustainable and environmentally responsible practices into payment solutions. This involves incorporating sustainability considerations into the design, operation, and delivery of payment systems, thereby promoting responsible consumption. SaaS encompasses a variety of initiatives such as offering less environmentally harmful payment options, implementing carbon offset programs, managing a more sustainable supply chain, promoting transparency, and educating customers.
Capitalising on SaaS while reducing costs
Incorporating climate impact considerations into a business strategy not only creates value and a competitive advantage, attracting new customers and improving retention rates, but also helps to reduce costs in several ways:
• Stay ahead of the competition: Offering tools that raise awareness about environmental impact and guide towards actions promoting conscious consumption can enhance customer acquisition. This strategy particularly resonates with the environmentally conscious Gen Z demographic.
• Engage the existing customer base: Supporting customers in major eco-friendly decisions, from buying electric cars to refusing plastic bags, contributes to sustainable budget management. This strategy not only reinforces a bank's position as the primary financial institution but also drives 'Top of Wallet' behaviour, positioning it as the preferred choice for all financial needs.
• Profit from the shift to net zero: Developing new revenue streams that expand the core business and applauding issuers who make extra efforts to implement less environmentally impactful tools can be beneficial. Establishing a mechanism that rewards issuers and their customers for planet-positive behaviours can generate additional revenue from value-added services that customers are willing to pay for.
• Mitigate non-compliance risks and improve P&L: By mitigating the risks of non-compliance with environmental regulations, businesses can conserve internal resources and enhance their P&L statements, thereby reducing costs.
Visa: A Catalyst for Sustainable Change
As a global connector and network, Visa operates within an ecosystem where environmental impact extends beyond just more sustainable card materials. This is merely the tip of the iceberg. The scale of this change affects everyone, and one doesn’t need to be an eco-warrior to find value in the transition. Visa is uniquely positioned to establish the foundational infrastructure to foster solutions that inherently consider environmental impacts and support planet-focused business.
Introducing Visa Climate Tech Services
Visa's Climate Tech Services (CTS) are designed to support our clients in aligning financial transactions with their environmental sustainability objectives and fostering more conscious consumption among their customers. By supporting banks to finance the transition of their customers to net-zero emissions, CTS helps deliver banking products that are focussed on their sustainability needs.
Our goal is to inspire and accelerate sustainability-focused consumption and behaviour with our clients and their customers, and to embed sustainability across all of our business functions. We aim to provide the necessary expertise empower Visa clients to develop a clear vision and a strategic roadmap, tailor their offerings based on what their customers value. Services we offer help them to maintain transparency so consumers and commercial clients understand their carbon footprint and how they can reduce it, and subsequent action consequently eases the stress on our planet.
As part of our commitment to assisting banking and other partners on their sustainability journey, Visa CTS includes consumer-focused services including Visa Sustainability Practices (consulting support), data products such as Visa Sustainability Index, and partner solutions such as ecolytiq and Lune. These services aim to accelerate the development of the sustainable behaviour and consumption ecosystem by supporting issuers in building customer-centric offers.
On the top of that we extend this offer by corporate solutions: Plan A, supports clients with their overall corporate carbon accounting, reporting, and reduction strategies. While, Lune offers carbon offsetting options for clients via an online marketplace that can be used by them, their clients or added to the checkout experience to let the final user also contribute. As more businesses prioritize sustainability initiatives and take action towards emissions reductions, Visa CTS emerges as a reliable partner in this endeavour.
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