Climate change is a defining issue for our generation and future generations to come. Nowadays, there is increasing pressure for businesses to act fast in order to reduce their carbon footprint, and financial institutions are no exception to this rule. Evie Rusman writes
Following the recent 2019 UN Climate Action Summit, the discussion around climate change is well and truly heating up with a lot of focus being put on world leaders to implement the necessary policies.
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One of the biggest worries is that the world will be unable to keep global warming below 2°C, which was a goal set during the Paris Agreement in 2016. However, if current trends continue, the world is likely to surpass this goal between 2030 and 2052, which would have a detrimental impact.
As a result, this has caused more scrutiny to be put on big organisations, including the financial sector, when it comes to sustainability and what they are doing to help.
So, what are the top financial institutions doing? Over the last few years, the world’s biggest payments companies have undertaken an array of programmes to help protect global ecosystems.
The emergence of these environment-conscious initiatives are becoming more common with the likelihood of them dominating the cards market over the next few years being high. For instance, last month Caixa Bank introduced biodegradable gift cards made from corn starch and biomass in a bid to further the fight against climate change.
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By GlobalDataThese gift cards last approximately two years due to their material composition. The bank is also looking into new ways to make regular chip and PIN cards more environmentally friendly.
Cards made from ocean plastic
Amex is the most recent card group to invest in a new eco-friendly initiative. In September, it announced its commitment to combat marine plastic pollution by launching a card to be made from reclaimed plastic collected from the ocean.
Along with this, Amex will fund a global call to action to #BackOurOceans, helping to remove one million Ibs of marine plastic through beach clean-ups. It will also launch a new American Express Card recycling scheme.
A spokesperson for Amex tells CI: “In 2018, we became a CarbonNeutral® company powered by 100 percent renewable electricity. We are committed to maintaining these achievements into the future.”
Amex partnered with Parley for the Oceans on the new initiative, having worked with them since 2018 to combat marine plastic pollution.
“Each new American Express Green Card will be made from approximately one plastic bottle that comes from the many tons of plastic that Parley collects from beaches and coastal communities across the world,” says the spokesperson. “This is the first step in a broader strategy we are pursuing to reduce the use of virgin plastic in other card products.
“In addition, we’re supporting two leading non-profit organisations, the National Geographic Society and the Ocean Conservancy, with nearly $2 million in grants to help fund their programs that seek to educate, raise awareness and help address the issue of marine plastic pollution.”
Amex also hopes to eliminate single-use plastics across its operations by 2025. This operation is currently underway in a number of locations around the globe.
Eco-friendly initiatives
Global Payments giant Visa was featured in the Dow Jones Sustainability Index which recognises industry leadership in environmental, social and governance performance.
Dana Haiden, Europe Regional Lead for Social Impact at Visa Inc., tells CI about Visa’s current sustainability projects.
She says: “At Visa we’re committed to growing our business and building an inclusive economy in a responsible, ethical and sustainable manner – one that is good for people and good for the planet. In 2018, Visa committed to purchasing 100 percent renewable energy by the end of 2019 as part of RE100, a global initiative uniting more than 100 influential businesses.
“As well as operating our business responsibly, Visa is committed to inspire and empower sustainable living worldwide. In September Visa co-founded a new initiative, Travalyst, led by His Royal Highness, the Duke of Sussex, dedicated to exploring and promoting solutions that will make travel more sustainable.
“Enabling global travel and commerce through digital payments is one of many ways Visa connects and empowers individuals, businesses and economies every day. We are dedicated to doing so in a way that supports our commitment to sustainability. We are proud to be part of this initiative to support long-term economic growth through tourism.”
Haiden also explains that Visa has enrolled in renewable energy programmes across the UK, San Francisco Bay Area and Colorado.
“We are proud of our progress yet know there is much more to do,” adds Haiden. “As we continue and expand our corporate responsibility and sustainability commitments, we will continue to prioritise the issues that matter most to our stakeholders, including our employees, clients, investors, consumers and others.”
Mastercard are also giving green a go in an attempt to improve its environmental footprint. Being one of the first in the payments industry to receive external recognition for its work, Mastercard aims to reduce its GHG emissions 20% by 2025.
As well as this, Mastercard source renewable energy for 100% of its global operations and have formed cross-sector partnerships such as the Greener Payments Partnership and the UN Global Compact Cities Programme.
A series of collaborations
In 2018, Mastercard announced its collaboration with card manufacturers, Gemalto Giesecke+ Devrient and IDEMIA, to develop environmentally friendly cards. However, since then there have not been many updates in term of the group’s progress.
This is not the first time Mastercard has publicly advocated for eco cards as in 2016, the payments giant teamed up with Bank of Åland, WWF Finland, KPMG and Gemalto to roll out a biodegradable card.
This push by card companies comes as the move to avoid the use of PVC plastic continues to accelerate. Not only is PVC considered a dangerous material, due to it being high in toxins, but it also clogs up our landfills adding to the fast-approaching climate crisis.
Nevertheless, despite the recent push from payment giants, pretty much all of our credit cards are still made from toxic plastics. So in reality, is enough really being done?
Motivation
Critics may think these new eco-friendly methods from the payments powerhouses are just a tactic to win over the heart and mind of the customer. But what are the reasons for this sustainable switch?
The Amex spokesperson says: “Protecting the environment is an increasingly urgent issue facing the global community, and it is one we know our customers and colleagues care deeply about. We’ve made significant progress over the last decade to reduce our carbon footprint and implement environmentally responsible programs across our operations and are committed to doing more in the years ahead.
“There will always be more that we can all do. We are committed to improving our environmental impact looking at energy and emissions management, waste management, third-party green building certifications, and responsible sourcing.”
Speaking on the financial industry as a whole, Haiden explains that much more needs to be done to reduce the threat of climate change.
“The financial sector is one piece of the equation,” she says. “To make positive strides towards tackling climate change, all sectors of the economy need to come together. No one sector’s efforts can solve the problem, this needs a collective effort. Our role in the Travelyst initiative is an example of what can be achieved when businesses across sectors are mobilised to act as a catalyst for good and we look forward to identifying more opportunities to drive positive change for people and communities worldwide.
