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How My Carbon Action helps banks fight climate change – and four reasons why they should do it

Monika Liikamaa

Co-Founder & Chief Executive Officer

We at Enfuce have walked our talk when it comes to sustainable payments. That’s why we are now helping banks fight climate change and turn their sustainability efforts into a future-proof advantage. We have created a solution that enables bank customers to calculate and reduce their personal carbon emissions – one payment at a time. 

By reading this blog, you’ll learn:

  • What sets My Carbon Action apart from other carbon footprint calculation tools
  • How can My Carbon Action help banks fight climate change
  • Why banks should enable more sustainable consumption amongst their customers

What makes My Carbon Action a unique tool for calculating bank customers’ carbon footprints?

My Carbon Action is a digital tool that allows banks and financial institutions to instantly calculate the carbon footprint of individual transactions. The calculation takes into account the environmental impacts of a product’s entire lifecycle: from raw material extraction, manufacturing, and transport to use and disposal. 

The tool is based on a country-specific scientific data model, which ensures that the information is relevant in each use location. Additionally, My Carbon Action is based on users’ own input on individual lifestyle choices. The lifestyle choices can relate to for example these main areas: 

  • Diet – Are you vegan, lacto-ovo vegetarian, or a meat-lover?
  • Housing – Do you live in a house or an apartment? How is it heated?
  • Mode of transportation – Walking, cycling, public transport, car sharing, or your own car?
  • Shopping – What’s the origin of your purchase? How is it shipped and packaged?

Understanding the context and impact is extremely important. When banks can combine their transaction information with their customers’ lifestyle choices, they can provide advice on more sustainable consumption. This combination is what sets My Carbon Action apart from any other carbon footprint calculator on the market. 

From the banks’ point of view, it is easy to get started with My Carbon Action. They can use these APIs flexibly and easily integrate them into their own apps and services. No new apps need to be built. 

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My Carbon Action works and what’s the science behind its carbon footprint calculations.

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How does My Carbon Action help banks fight climate change?

The country-specific data models and users’ own inputs make it possible to turn payment data into advice. The recommendations then help change behaviours. Here’s how it works. 

Integrating sustainability into personal financial management

As we learned, banks are able to collect massive amounts of information on their customers’ behaviours and preferences. This data is not only relevant and interesting but it can be complemented with advice on reducing personal emissions.

In the recent past, banks have already deployed a variety of personal financial management solutions. These solutions provide information on where and how customers are spending or saving their money. 

Now, bank customers can also receive information on the sustainability of their consumption. My Carbon Action is powered by over 100 personalised tips on how to reduce the carbon footprint. This way, personal financial advice benefits all three: the bank, the consumer, and the environment. 

Enabling bank customers to realize the potential of small lifestyle changes

To meet the requirements of The Paris Agreement, individuals are expected to reduce their personal carbon emissions. But if you are starting from ten tonnes of personal emissions, getting down to only three tonnes might sound quite daunting. 

My Carbon Action gives you advice on how even the most ambitious reduction targets can be achieved. In fact, it might be much easier than it sounds. Bank customers can for example calculate how much they could cut their personal emissions by going vegan for just a week, or by cycling to work instead of driving. 

Small choices have a great impact in the long run. My Carbon Action helps make the impact of those daily choices more noticeable – and actionable. When a goal is achievable, it is easier to get started. 

Why should banks support more sustainable consumption amongst their customers?

There are many good reasons why banks should aim to reduce their customers’ emissions. Ranging from the desire to improve banking operations to aiming to become a thought-leader of the future, there are at least four important reasons to walk the talk with us.

1: Fighting climate change is not just a charity effort – it is at the core of future-proofing your operations

The world is changing fast. Industries evolve rapidly. Consumers are more informed, which affects their preferences and expectations. Banking will probably survive through these changes, but banks might not. At the very least, they might need to evolve. 

Banks are now faced with the choice of either being part of the solution or part of the problem. It is not just a matter of what is right but also long-term economic viability. Enabling sustainable consumption is one way that banks can future-proof themselves. 

Sustainability efforts are too often seen as a cost or a “necessary evil”. We see it more optimistically, and our view goes beyond charity. In many cases, increased sustainability is a great opportunity. By taking care of environmental concerns, banks are also future-proofing their operations. 

2: Sustainability efforts help improve the customer experience and satisfaction

Consumers are more informed about climate change and more conscious of the impact of their purchasing behaviours. Banks can tend to the relationship with their customers by providing them with relevant insights on their behaviours. 

When a large Dutch banking corporation got started with My Carbon Action, users found it very insightful to receive concrete information on the environmental impact of their choices. Green energy, meat consumption, and plastic packaging in particular were topics of interest. Over 90% of new users answered the lifestyle questions in the My Carbon Action app. It has already had a positive effect on the lifestyles of 30% of the users.

3: Promoting sustainable consumption helps the bank manage its own risk

As part of future-proofing their operations, promoting more sustainable consumption is a way for a bank to manage its own risks. That is because, in many situations, ecological concerns tie in seamlessly with the economic ones.

Let’s imagine a situation where a bank finances the loan for their customer’s house. If the customer goes for geothermal heating instead of district heating, the customer reduces their housing-related emissions. At the same time, the property value increases, which decreases the bank’s collateral risk. 

4: Banks have a lot of power in fighting climate change – and should do their fair share

Last but not least, banks should support more sustainable behaviours amongst their customers because it is the right thing to do. Banks have a key role in fighting climate change and advocating climate-conscious lifestyles amongst their customers. There are four main reasons that make them particularly powerful: 

  • Handling money enables consumption: This means that banks also enable consumption-related emissions. Studies have estimated that 70% of CO2 emissions are driven by consumer behaviour. Consumption-related emissions are therefore a joint effort between the banks and their customers. 
  • A huge number of customers: Imagine a small bank with only 300 customers enabling more sustainable consumption one customer at a time. Now, imagine the same, but with three million customers. The positive total impact of small lifestyle choices accumulates fast!
  • Access to transaction data: As we know, banks have the means to collect insights on consumer behaviour, consumption patterns, and preferences. And that’s not all – they can also make use of that knowledge and turn it into actionable advice. 
  • Incentivising sustainable buying: As we learned, this helps cut emissions, improve customer experience and manage the bank’s own risk. Banks can for example offer dynamic credit interest depending on what their sustainability score is, or carbon-cutting loyalty schemes.

Learn why banks are key enablers in helping consumers live more sustainably.

It’s not always about consuming less – but consuming better 

It is important to keep in mind that Rome wasn’t built in a day. Moving towards more sustainable consumption does not necessarily mean spending less. Instead, it’s about making more responsible and sustainable consumption decisions, one choice at a time.

A taxi company, for example, cannot remain operational without cars – but the type of car matters. Whether it’s diesel, hybrid, or fully electric, and how long its expected life cycle is, there may be significant differences in the emissions between these alternatives. A transportation alternative with fewer emissions might also have lower running costs.

Banks have an opportunity to effect change at every single encounter with their customers. They can for example finance the taxi company’s loan for the car in a way that incentivises the better choice, such as by offering lower interest rates for more sustainable options. 

By promoting better consumption amongst customers, banks are also indirectly reducing their own emissions. It is a chance for the bank to showcase responsibility in concrete terms – by actually reducing emissions, instead of just reporting on financial activities. 

The best thing a bank can do is choose to see sustainability as an opportunity – instead of a cost or a burden. By addressing the customers’ sustainability concerns, a bank is responding not only to their current needs but also to those of the future – among the firsts. 

Learn more about My Carbon Action and make sure you are among the future thought leaders in banking!

Watch this webinar recording to learn how you can help your customers live more sustainably, and why you should do it.

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