Today’s modern consumer is more sustainability-conscious than ever before. According to the Deloitte Sustainability & Consumer Behaviour UK report, 69% of consumers are already making an effort to reduce food waste, whilst two-in-five (40%) are opting for brands that have environmentally sustainable practices and values. On top, almost two-thirds (64%) also looking to limit the use of single-use plastic.
With consumers making more sustainable and ethical choices, financial services institutions have a responsibility to drive positive change and support the circular economy. People demand sustainable offerings from their banks as they increasingly realise their purchasing decisions can have a substantial impact on the planet. What changes can banks implement then to satisfy the needs of a green consumer?
Payment cards are the key to financial accessibility, and a symbol of change for both banks and end-customers. The selection of a sustainable payment card is the perfect starting point. And so are effective eco-partnerships to make further progress for both banks and society as a whole.
The bank card conundrum
Banks cards are attractive and popular means of payment. In fact, the number of credit, debit and prepaid cards in circulation worldwide now sits at 17.2 billion in 2021, with a projected increase to 21.6 billion by 2026, according to Global Data, which collected data from 74 countries. With cards becoming more popular as a major form of payment across the globe, it is critical for banks to select the right one that can best reflect their sustainable commitment and tackle the raising concern of plastic pollutions. Through the issuance of more sustainable payment cards, banks will not add up to the global issue but instead, raise greater awareness amongst the public for the need for all to join forces to solve climate issues.
Reducing the impact of avoidable plastic pollution
An efficient way for banks to become part of the environmental solution is to eliminate the use of virgin plastic and reduce the negative impact of avoidable plastic pollution. There are many alternatives available which are much more eco-friendly. For example, bio-based PLA cards, recycled plastic cards and ocean plastic cards. However, in the path toward sustainability, the risk of greenwashing is still co-existing, which formulates a greater problem to the overall climate puzzle.
For instance, some eco-card products claim to be eco-friendly, when in fact they’re made of mixed plastic layers. Eco-cards with large proportion of virgin plastics and mixed plastic layers bring significant costs and technical challenges for card recycling.
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They create an unhealthy market environment for the adoption of truly sustainable card solutions. Above all, they put banks at risk of damaging their reputation by offering such products as consumers nowadays are well-educated and informed. Thus, it’s always best practice to conduct through research before making a switch.
Sustainable physical cards enhanced with sustainable digital solutions
A little-known fact is that a bank card can be made up of recycled ocean plastic from the ocean surface or collected from coastlines and communities. A great example of such a card, and a fruitful eco-partnership in the financial services industry, is the WLTH Parley Ocean Plastic VISA card in the Australian market, made from 75% recycled plastic waste collected on beached around the world, the remaining 25% from same recycled plastic material from other sources.
Sustainable physical payment cards enhanced with sustainable issuance solutions and digital services is, therefore, the way forward. For many banks, cards can be the entry point of sustainable end-to-end offerings, ranging from a sustainable card body and recycled packages, to carbon tracking plug-ins on banking apps. The provision of eco-cards made of 100% the same materials can enable the development of end-of-life card recycling programme, supporting the circular economy.
Working together in the digital space
Alongside physical cards, banks should also explore how digital solutions can enhance their sustainability practices. One such way is by developing and promoting new services that calculate how much CO2 a consumer contributes each time they make a purchase. With the know-how of the right fintech partner, banks can create a new offering for consumers, showcasing their carbon footprint through a visual dashboard.
A great example comes from the Swedish fintech start-up, Doconomy, which empowers its customers to track their individual environmental impact. The calculation is based on the purchases, orders, and bookings, including groceries and air travel, encouraging consumers to reduce negative impacts through informed behavioural change.
Another digital solution could be developed for the purpose of carbon footprint compensation. This is something offered by a platform called Patch, which businesses can leverage to embed carbon removal into their products directly via a flexible API, as well as purchase anywhere from a gram to a giga-tonne of carbon removal from reputable and trusted projects.
Digital solutions born out of eco-partnerships like these will help inject extra transparency into the impact of our purchases, encouraging consumers to make better informed, greener choices when it comes to purchasing decisions. Carefully chosen partnerships can also open up opportunities to work with sustainability-focused networks of volunteers, who take action through clean-ups and plastic interception in the oceans and coastlines on a global basis.
This can be taken a step further and completed in collaboration with local businesses and organisations, helping to protect marine environments for the future as part of community building. Alongside involvement in clean-up projects, financial services institutions can also take actions to help fund educational programmes and implement ecosystems protections for a thorough, meaningful and collaborative contribution to the environment.
Taking collaborative steps forward
Financial institutions have a unique opportunity to build a sustainable financial services ecosystem, where knowledge and best practice is shared regularly between stakeholders and where offerings complement each other for the benefit of the planet. There are many practical measures banks can take to satisfy more eco-conscious consumers, including the offering of sustainable bank cards to help reduce plastic waste.
Digital innovations can also help raise awareness among consumers of where environmentally friendly actions can be taken. To top ideas off, banks can partner with local communities to get involved in clean-up operations and other sustainable initiatives to make a tangible difference. With the expertise of technology-focused partners, financial institutions can become drivers of change, helping to achieve international environmental and global warming goals, while meeting the sustainable aims and requirements of consumers.
Mikko Kähkönen is Head of Payment Cards Portfolio, Giesecke + Devrient