Minimizing carbon footprint: Impact on the banking and payments sector

Today’s consumers are more environmentally conscious than ever before, increasingly comparing banks based on their sustainability pledges and placing them at the forefront of their financial decisions. Research from Giesecke+Devrient has found that almost two-thirds (64%) of Generation Z would change banks if they felt their provider fell short on ethics and environmental sustainability.

However, sustainable offerings need to be authentic to avoid the risks of greenwashing. In the past year, consumer trust in banks and financial organizations has been tested due to a 70% increase in greenwashing incidents globally, as reported by Reuters in October 2023. Therefore, it’s no longer enough for banks to claim they are sustainable, they instead need to make credible commitments to sustainable banking. What changes can banks implement then to satisfy the needs of a green consumer? 

Transformation of payment cards
Alongside cash and digital services, the payment card is a cornerstone of modern consumer transactions, they are the physical connection between the consumer and the bank’s brand. Banks now commonly distribute cards made with a high level of recycled PVC material (up to 100%) and designed to be carbon neutral.

Certain banks are also reinforcing their commitment to card sustainability by utilizing cards made of plastic collected from the oceans and coastal regions. Similarly, more cards are being made from polylactic acid, which is derived from fully renewable biomass and able to be industrially composted, with no toxins produced if incinerated. 

Incorporating digital solutions for sustainability
Alongside physical cards, banks should also explore how digital solutions can enhance their sustainability practices. One such way is by developing and promoting new services that calculate how much CO2 a consumer contributes each time they make a purchase. By collaborating with the right partner, banks can create a new offering for consumers, showcasing their carbon footprint through a visual dashboard.

Exploring beyond physical world 
Beyond tangible card transformations, retail banks can further elevate their credible green claims with digital tools. For example, the card issuance process has traditionally involved paper letters being sent out to customers to share PIN numbers. 

An ePIN service can allow customers to receive their PIN in a paperless way, either via a mobile app or SMS message, thereby reducing waste.

Additionally, digital onboarding of new customers significantly cuts down on paperwork and saves time, further enhancing efficiency. This shift not only improves customer experience but also contributes to a substantial reduction in CO2 footprint by minimizing the need for physical documents and in-person visits.

However, it is a universal truth that for every action (force) in nature there is an equal and opposite reaction.  And, when it comes to carbon footprint, the influence on the ecosystem is substantial. From greenhouse gas emissions contributing to climate change to plastic waste threatening marine life, these matters command our consideration.

It is not a one-man or one-organization responsibility to bring about the positive change in the ecosystem – but a teamwork that needs to be orchestrated for a common goal. In conclusion, embracing sustainable practices presents a tangible opportunity for individuals and businesses alike to contribute to a greener future. 

Banks and financial institutions can integrate sustainable strategies to serve this growing demand from their customers. By incorporating these sustainable and efficient tools, we can collectively reduce our carbon footprint, and pave the way for a more environmentally conscious society. 

Let us continue to prioritize innovation and environmental stewardship in our daily choices, knowing that even small changes can make a significant difference in preserving our planet for future generations.

--  Naresh Rao VP & Sales Head Issuance Products, Giesecke & Devrient India Pvt Ltd.