This April 22nd marks the 42nd annual Earth Day. Created in 1970, Earth Day is an annual event designed to demonstrate support and encourage activism for environmental protection. Widely lauded as the largest secular observance in the world – Earth Day is followed by over a billion people every year who aim to change behaviour, both on an individual, company and policy level.
Recent landmark events have brought this to attention to record levels – whether it was adoption of the Paris Agreement in 2015, or more recently, the spotlight on COP26 in November 2021 – the sense of urgency is growing.
Invest in Our Planet
The theme for this year’s Earth Day is ‘Invest in our Planet’, with organisers calling on us all to take action. Now more than ever there’s a greater emphasis for businesses to reassess, double down or create new ESG efforts.
Beyond the environmental impacts, there’s no shortage of other reasons why businesses should be investing in ESG initiatives. According to a PWC survey, 86% of employees prefer to work for companies that care about the same issues they do and 83% of consumers think companies should be actively shaping ESG best practices. Organizations do share this sentiment, with 91% of business leaders stating that their company has a responsibility to act on ESG issues.
Why Financial Services Needs to Invest in ESG
While researching this piece I came across this article by John Nyström, Global Business Manager at Econans – which explored the power that the financial services sector holds in fighting the climate crisis, specifically retail banking. Nyström’s piece argues that banks are in a great position to help fight climate change because they are present in consumer’s everyday lives – giving them prime opportunity to influence customer behaviour for the better.
Aside from the impact the financial organisations can have on consumer behaviour, another reason why banks should take ESG seriously is the priorities of the Millennial and Gen Z generations. Millennials are currently slated to receive one of the valuable transfers of inheritable wealth (estimated to be close to $68 trillion by 2030), and are known to be very environmentally conscious.
A recent survey suggests that Millennials are twice as likely to invest in a fund or stock if social responsibility is a component of the value creation narrative. Further, it found up to two-thirds of Millennials view their investment decisions as an important component of their social and environmental principles. The sooner banks and businesses relay their intention to embed ESG criteria in their corporate practice, fund allocation and investment portfolios, the better will they be in acquiring this important client base.
Another example of sustainable efforts in the banking sector relates to card payments. Every year 3.5 billion new bank cards are produced – the amount of plastic this uses weighs roughly the same as the Eiffel Tower twice over – that’s a lot of plastic.
To counteract this, there are efforts being made to create eco-friendly cards with innovative and sustainable components. For example an innovative approach reduces the amount of new plastic while fighting sea pollution, with a card made of Ocean Plastic® collected by Parley for the Oceans. This innovative material comes from plastic waste collected from coastal clean-up operations, in partnership with “Parley for the Oceans”. Banks can also reduce their first-use plastic with a recycled PVC card that is made entirely with plastic waste from the packaging and printing industries.
Another cool example of using eco-friendly materials to avoid plastic waste is the Thales Gemalto Bio Sourced PLA cards. These cards replaced 84% of fossil-based PVC with bio-sourced PLA made from non-edible corn of all things. The material is non-petroleum-based and non-toxic if incinerated. The product is the 1st bio-sourced payment card certified by UL ECV Program in the world. Providing third-party credibility to the environmental claims of the card. It’s now listed on the platform SPOT UL, a database for customers to seek out ‘green’ products and solutions.
This is an initiative that my colleagues have made great strides in. To date, Thales has deployed 30 million eco-friendly payment cards for banks and card issuers without compromising the user experience. In fact, we became the first company with a full portfolio of cards certified by the Mastercard Sustainable Card Program. By assessing sustainability claims on behalf of the industry, the Mastercard Sustainable Card Program aims to pivot all card selection programs towards eco-friendly solutions, making sustainable choice the default rather than the exception.
This is just one example, in just one sector of the initiatives being taken to take action and invest in the future of planet. There are countless others out there, which should be shared and discussed – especially on a day like today.