Carbon management is about understanding how and where an organisation’s activities generate greenhouse gas emissions. This includes emissions from internal activities (scope 1), indirect emissions (scope 2) and all the greenhouse gases an organisation is indirectly responsible for, up and down its value chain (scope 3).
Carbon management helps banks identify where and how to reduce carbon emissions. Ultimately, it is about incorporating an understanding of carbon data into strategic decision-making.
Every product/service we buy has a carbon price tag. But that price tag has been invisible to customers, until now.
As banks possess customers’ transactional data, they are well-positioned to help customers understand the carbon impact of their spending. Plus, the introduction of open banking means financial institutions can collaborate with fintechs to deliver carbon management solutions to their customers.
Understanding carbon emissions is an important first step on the sustainability journey. By empowering customers with this information, banks play a vital role in the fight against climate change.
Imagine if every banking customer reduced their carbon footprint by just 10%... Now that’s scalable climate action.
Insights from our pilot with NatWest showed the average user saved approximately 11kg of CO2 emissions per month by committing to behavioural changes that used less carbon—such as composting, reducing meat consumption, or switching utility providers. If this behaviour is 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.
Not only is there significant potential for huge carbon savings, but implementing a carbon management strategy can help drive ROI for banks. Here’s how:
We conducted research with over 2,000 banking customers and discovered that 62% of respondents want their bank to help them reduce their environmental impact, and this was even higher among people under 25 (71%). Banks that take a proactive approach and provide customers with carbon footprint information will attract this growing segment of conscious consumers.
Carbon management gives banks an excuse to engage customers through the mobile banking app experience. Banks can educate customers on their personal carbon footprint and their progress towards sustainable goals. It also provides an opportunity to personalise the banking experience and speak to customers on the sustainability issues they care about.
Carbon management offers banks the opportunity to promote green finance offers based on users' specific needs. For example, if a customer emits significant carbon emissions on their daily commute, the carbon manager might recommend they switch to an electric vehicle (EV) to reduce their impact, and the bank could offer a green loan to help them afford an EV. This would both help accelerate users’ positive impact and financially benefit banks too.
Recent Cogo research highlights that business owners often feel overwhelmed when setting sustainability goals and determining how they’re tracking compared to competitors or within their industries.
The research highlights that one of the main barriers to climate action is a lack of understanding of what a carbon footprint “looks like” in the day-to-day business environment. Banks can provide this information and help businesses track and reduce their carbon footprint. This in turn, would help banks meet ESG requirements.
Banks can promote partner offers and marketplace solutions to help customers find more sustainable businesses. For example, the carbon manager might highlight that a customer needs to switch to more energy-efficient light bulbs and promote a sustainable business that could offer the product. This would help customers easily make sustainable changes, benefit SMEs and improve the relationship between the banks and their customers.
There is increasing pressure on banks to report on their ESG (Environmental, Social and Governance). Carbon management helps banks understand their scope 3 emissions, which in turn, supports ESG reporting.
We’ve developed carbon management solutions to help your customers—both retail customers and SMEs—calculate their carbon footprint and empower them to take action to reduce their impact.
Encourage behaviour change: We use behavioural science techniques, like nudges to encourage climate action, and we motivate users with incentives and rewards.
Increase retention: Users gain access to a live transaction feed that gives them information about their carbon footprint and their progress towards their set carbon budget. We also send push notifications to encourage users to check their carbon footprint throughout the month, helping engage users.
Improve carbon literacy: We focus on educating people about the impact of their spending, and we communicate the carbon footprint on a spectrum which uses scale and colour to help visually compare the impact of different actions.
Deliver a personal experience: We use spending data to offer users a bespoke experience. One that speaks to them about the sustainability issues they care about.
Download our white paper to learn more about how our product drives climate action.
Our Business Carbon Manager tool uses a spend-based approach to calculate carbon footprints, making reporting and analysis easy for businesses.
Business owners can see how their spending directly impacts their carbon footprint. And they can identify how to reduce their operational emissions.
Key Business Carbon Manager features:
Give your business customers what they really want, request a demo today.
We’ve launched a new ‘climate actions’ feature in the NatWest carbon tracker. Read our blog to discover how this new feature deepens customer engagement, develops carbon literacy and helps customers take more meaningful climate action.
We don’t need a crystal ball to predict that economies globally will likely get worse before they get better; or that energy prices and interest rates will continue to rise. But what does it all mean for the climate; consumers and banks? Emma Kisby, Cogo’s CEO UK/EU; and Julie Lindenberg, Cogo’s CEO APAC, sat down recently to discuss the themes they believe will play out over the months ahead and what it will take for us all to achieve lasting change.
Following COP27, we gathered leading sustainability experts to discuss how banks can play a more urgent role in the climate transition. Keep reading to discover some of the key insights from the conversation between Gary Kendall, Head of Climate Strategy Implementation at Natwest, Paul Watchman, Special Legal Adviser for UNEP, Jonathan Ward, Senior Carbon Impact Manager at Cogo and Madhvi Mavadiya, Head of Content at Finextra.