With consumers increasingly keen to understand their environmental impact, banks are in a unique position to provide this insight.
Banks can integrate carbon tracking into their offering to enable their customers to understand the impact of their spending. Tracking can also influence users to make more sustainable behaviour change and it offers ways to offset carbon.
Not only does this solution help meet customers’ needs but it empowers banks to engage with customers and make a meaningful contribution to solving climate change.
Carbon tracking is essentially a way to measure an individual's carbon footprint.
Breaking this down further, a carbon footprint is defined by the World Health Organisation (WHO) as a “measure of the impact your activities have on the amount of carbon dioxide produced through the burning of fossil fuels.”
Many of our daily activities—like driving and heating our homes—produce greenhouse gas emissions. With many different sources of GHG emissions, calculating a carbon footprint can be a complex process.
As carbon emissions are linked with spending, one efficient way to estimate a customer’s footprint is to use transaction data.
How does this work? Most approaches break spending down into categories, for example, food, gas, transport, etc. The categories are then contextualised with research and publicly available emissions data to give consumers their calculations. Through customer feedback loops, the calculations are then refined.
Luckily, AI can help make this process a lot simpler. And banks can seamlessly integrate carbon trackers (like Cogo 😉) into their digital experience to quickly analyse, categorise and translate transaction data into simple carbon insights for customers.
Financial institutions can scale their impact by involving their customers in climate action instead of solely relying on in-house CSR initiatives.
Insights from a pilot we carried out with Natwest showed the average user saved approximately 11 kg of CO2 emissions per month by committing to behavioural changes that used less carbon – such as composting, reducing meat consumption, or switching utilities providers.
If this behaviour was replicated across NatWest’s 8 million customers who use the mobile app, it would save more than 1 billion kg of CO2 emissions per year, equivalent to planting 17 million trees. Now that’s powerful, scalable climate action.
By providing customer transparency, banks play a vital role in the fight against climate change: inspiring widespread climate action. Banks also reap the following benefits:
Customer facing sustainability efforts can enhance the reputation of a company, increase brand value and position the bank as a leader in sustainable finance solutions.
Providing customers with information on the impact of their spend on their carbon footprint motivates them to log-in and engage. Banks can also send personalised recommendations and nudges on steps they can take to reduce and offset their impact, helping to increase engagement.
Offering carbon tracking and insights will help give banks competitive advantage and attract the growing segment of conscious consumers.
The mandatory ESG (Environmental, Social, and Governance) reporting requirements and political pressure around carbon mitigation have affected the banking industry. Carbon tracking contributes positively to ESG performance. ****
Our API solution enables your customers to measure, reduce and compensate for their carbon footprint. Using credible data mapped to specific spend categories, you can empower and ethically 'nudge' your customers to take real action and reduce their carbon footprint.
We can build all of this into your own digital ecosystems and brand identity. So, if you’re looking for a sustainable business solution, and you want to be on the right side of history, alongside some of the world’s biggest banks, then get in touch today.