At Cogo we believe that measuring impact is really important for every person and every business as it helps build understanding, helps identify areas to improve, and enables you to track your progress.
We don’t often think of climate change in the same way…but I’m convinced that we should. Progress on addressing climate change can feel a little like the now famous line from Apollo 13. When their moon-bound spacecraft was wrecked by an oxygen tank explosion, the astronauts urgently radioed, “Houston, we have a problem...” Houston’s response is far less famous, but equally as important: “What’s your data telling you…?”
Like the crew, we know “we have a (climate) problem…” but we don’t have a good handle on the data telling us how bad the problem really is, or how it relates to us. Not only that, but not understanding the full extent of the problem makes it even harder (and often brings eco-anxiety) in knowing what to do next.
Stay with me, I promise I’ll break it down so it's easy and quick to understand.
From a climate change perspective, a personal carbon footprint is the carbon emissions associated with someone’s actions, consumption and lifestyle choices. A carbon footprint is measured in kilograms of carbon dioxide equivalent (CO2e) and represents a user’s personal contribution to the gases that cause climate change.
Cogo’s belief is that an accurate understanding of this ‘data’, i.e. your personal carbon footprint, is a foundational step in your climate action journey and should precede the decision to take action to reduce it; as well as gauge how effective your actions are. Measuring our carbon footprints moves us beyond what can be quite confusing (more on that later) to “What do I need to do to change that?” When you remove the measurement barrier; you often remove the greatest obstacle to climate action.
Before we dive into how we measure our users’ carbon footprints at Cogo, it’s important to understand some fundamental truths about this type of data:
Consumption emissions are where you and I can play a key role in shifting the dial. We are the demand side of the equation. Cogo’s approach personalises the climate crisis by driving home the ‘big picture’ - that if we’re all responsible; we also all have the power to do something about our impact.
Cogo’s Carbon Footprint Tracker (available via our free-to-use app in the UK, and API and white label solutions globally) is a user-facing tool that enables easy understanding of your carbon footprint - by aggregating the footprints of the products and services we buy.
How do we do this? The below flow diagram explains the process in four steps:
The footprint is calculated by analysing a user’s banking data and matching every one of their transactions to a specific business type (fashion, grocery, insurance etc). Each transaction is then multiplied by an ‘emissions factor’ (how much carbon that type of activity emits per unit of spend e.g. $) to work out the carbon footprint of that transaction. In other words, every time you use your card at the petrol station you can see the footprint associated with that purchase. All of these individual transactions are combined into a daily, weekly or monthly view of an individual’s carbon footprint.
Within each market, we use output from the best available ’Environmentally Extended Input-Output Model’ (EEIO model) to enable our footprinting work. This sounds complex - and it is - but what’s important to note is that these amazing models take into account ‘economic flows’ (the movement of raw materials and production processes, and the associated money) across sectors and regions and map these to environmental information about those industries and how they operate to ensure emissions factors are as accurate as possible. For example, raw materials that originate within the mining industry might end up becoming part of a car, or a gardening product.. EEIO models account for this complexity, and track the carbon emissions through the entire supply chain as accurately as possible through clever calculations.
When we apply emissions factors to spend categories, our team of data experts works hard to ensure the application is as accurate and granular as possible. In addition to emissions factors, our model takes into account contextual data gathered from users including lifestyle choices. In the case of someone who follows a vegan diet, we factor a lower carbon footprint into their supermarket shopping as meat and dairy products have the highest emissions intensity.
While the Paris Agreement (the long-term goals that guide all nations around substantially reducing global greenhouse gas emissions globally) focuses on big targets for countries, its remit is focused on the production side of the emissions equation (the emissions from the making or producing goods). That’s a powerful number for countries to target, but it misses out the consumption side of the equation. Government and big business have an important responsibility in driving down carbon emissions, but small businesses and the wider public also have a role to play to limit global warming. Cogo’s carbon footprinting tool makes it easy for us all to account for all of the production and consumption emissions we are responsible for when we buy stuff. This is the real ‘bigger picture’ about the big problem.
It’s time to change that famous line! “Houston, we have a problem. But we're measuring it, we know what we need to do to fix it, and we're getting on with it.”
Following helping users to understand their personal carbon footprint, we also help them to take meaningful action, head to our blog to find out how.
Cogo has announced a partnership with fintech innovator Moneytree that will enable consumers to track the carbon emissions associated with their spending habits through their everyday banking apps, making it easier to accurately understand the impact of their spending and take meaningful action to reduce their impact on the planet.
Cogo’s research reveals that the higher someone’s carbon literacy, the greater the likelihood of them taking climate action. Read our latest report to uncover these original insights and discover how banks can improve their customer’s carbon literacy.
As we continue to connect with business leaders this week as part of the New Zealand Prime Minister’s Trade Delegation to Australia, our APAC CEO Julie Lindenberg reflects on her recent visit to Australia and the urgent need for businesses to lead the change when it comes to climate action.