Revisiting eco-friendly credit cards – The DO card from Doconomy
Sweden: the country of the flight-shaming movement and Greta Thunberg
Perhaps what sets Sweden apart is a combination of citizen engagement, collective ambition, and high awareness of climate change challenges.
The message we get from Sweden is clear: we need to make radical changes in our daily habits if we want a survivable future— it happens now, and it’s up to us.
For Swedes, 78% believe that they can personally act to slow down climate change, and it comes as no surprise that many innovative climate-conscious programs are coming from the Kingdom.
So let’s take a close look at this one initiated by Doconomy.
This initiative combines eco-conscious spending with eco-friendly credit cards and highlights one of the many noticeable changes in consumer attitudes.
The DO card: Revisiting the green credit card approach
In 2018, the United Nations released an urgent report stating that we need to cut CO2 emission by half in 2030 to avoid an irreversible carbon crisis.
In 2019, a Swedish Fintech, Doconomy, took on the challenge and launched DO, a mobile banking service for every day’s climate action.
Doconomy wants to inspire personal change in behaviour, reduced consumption, and compensation with the digital banking service DO.
The free Do app is connected to a credit card that enables the cardholder to track and measure its carbon footprint for each purchase and to compensate for its impact day by day.
Do works differently from so-called green credit cards that donate a percentage of every purchase to the green economy with more or less transparency. Beyond that, it is notorious that some banks issuing green cards also fund fossil industries.
Being conscious of the impact of your purchases might be better for the climate than selecting an eco-friendly or “green” credit card.
Let us explain.
Reduce your carbon footprint day by day
The DO mobile banking service lets users track and reduce their CO2 footprints through carbon offsetting.
It’s a very tangible tool for those who want to make a difference.
The carbon impact metrics displayed alongside the transaction provide essential visibility to fully inform the consumer for a conscious decision.
The information is based on the Åland Index developed by the Bank of Åland. It calculates an approximates impact from the goods and services bought with the DO card.
Users are also being invited to compensate for their greenhouse gas emissions through projects meeting the UN-certified green project criteria.
UN-certified carbon offset schemes allow clients to invest in environmental projects worldwide to compensate for their carbon footprint. These projects are developed to reduce future emissions and are often located in developing countries. DO offers different themes for these projects.
They range from cleaner-burning cooking stoves and wind-generated electricity to clean waste disposal, all of which contribute to global emission reduction.
Initially, the service is being rolled out in Sweden with other European countries to follow.
But there’s more.
Doconomy DO Black is even more radical.
We’ve seen that users can make their daily purchases with the DO card, tracking the carbon emissions associated with their spending with the DO app.
Doconomy goes one step further by adding a premium card to its offer.
But instead of introducing a premium black credit card with its typical benefits to encourage further consumption, Doconomy does the opposite with Do Black.
It’s the world’s first credit card with a carbon limit, setting a maximum to your footprint for the year.
In other words, it’s the first credit card ever to stop you overspending based on the level of CO2 emissions generated by your consumption.
Yes, you read that right.
The DO Black card won’t let you buy anything else after you’ve hit your carbon quota.
It’s presented as an educational effort, according to one of the founders.
The carbon limit is tailored to the national limit defined by the world leaders under the Paris agreement and aligned with the 2-degree target for 2030.
In Sweden, the average consumer is responsible for approximately 19 tons of carbon emissions each year from consumption. The 2030 monthly limit is 791,5 kg CO2 per capita (9,5 tCO2e – carbon dioxide equivalent).
Eco-friendly cards: step by step
In addition to the mobile app, customers can apply for an eco-friendly DO Mastercard card.
Biodegradable green cards
Thales is supplying and personalizing the Gemalto bio-sourced card, a card made from Poly Lactic Acid (PLA) – a sustainable plastic substitute for biodegradable cards.
Using renewable sources such as corn, the green credit card can be recycled back to its initial resin over and over again without loss of quality. It is non-petroleum based and non-toxic if incinerated.
With no mag stripe nor signature panel
What’s unique about this environmentally-friendly credit card is that it has no magnetic stripe or traditional signature panel.
This is important because these components are not made from renewable resources and turn banking cards into a compound, which makes them difficult to recycle.
• Doconomy is providing the mobile banking service to its customers;
• Thales is supplying the card and personalization services;
• Mastercard has approved this one-of-its-kind design with no magnetic strip or traditional signature panel.
Following a Creative eCommerce Grand Prix win at Cannes Lions 2019 – an award that usually goes to well-established global brands – it’s clear that this start-up is making its mark on the global eCommerce scene at the intersection of finance, technology, and sustainability.
The Jury appreciated Doconomy’s ability to create an emotional connection to the DO carbon credit card and initiate an idea everyone would want to steal.
Doconomy’s efforts are symbolic of a changing industry.
Here’s the big idea.
Noticeable changes reshaping the card industry
Consumer awareness about climate change risk has grown globally.
So much so for banks and fintechs.
In December 2019, the Bank of the West joined the climate-friendly scheme, a first in the US. The San Francisco-based bank has just over 2 million customers and $91.5 billion in assets.
The subsidiary of French banking group BNP Paribas will offer a carbon-tracking feature in their banking apps. Clients need to opt-in to get their spendings’ carbon footprint measured.
The application also comes with a biodegradable card.
Mastercard and Nordea are working on a similar project according to Fintech Futures.
Another remarkable regional initiative is the Baltic Sea Card from Ålandsbanken.
It’s presented as the payment card for a cleaner Baltic Sea.
This card is made from environmentally friendly materials and coupled to the Åland Index.
The cardholder can estimate the carbon footprint of everyday purchases and use that information to help the environment by supporting local or international initiatives or by adjusting some aspects of his/her lifestyle.
Eco-conscious consumers are dictating changes. They want to make more sustainable choices, and a lot of data indicate they are ready to change brands to support a cause they believe in.
One thing’s for sure; money is a powerful asset for change.
Consumers are acknowledging more acutely how much impact they can apply over the financial system and our society by channelling their spending decisions into actions that benefit them, the community and the planet.
That’s what Triodos Bank UK expects.
The company has put sustainability at the heart of its operations. The Bank only lends money to organizations and projects that are making positive environmental and social impacts.
To top it off, Triodos provide customers with an eco-friendly smart debit card from polylactic acid (PLA). The card is believed to have the most reliable environmental credentials of any payment card in the UK.
The Bank anticipates these actions can help eco-conscious citizens to move to a bank which shares their values and is effectively creating a real, positive impact on society.
This transformation of consumer behaviour does not go unnoticed.
Even the 50-year-old iconic American Express card is changing in 2020.
The recently-announced American Express Green Card still features the familiar Roman centurion. Still, the card is now made from 70% of reclaimed ocean plastic collected by Parley for the Oceans according to CNBC (5 March 2020).
In parallel, the credit card giant has also recently announced a recycling service for its credit cards, which will roll out in 2020.
As of 31 December 2019, Amex had globally 114.4 million cards in force.
American Express is also putting in place a strategy to reduce single-use plastics across the entire company.
But stick with us here to understand what consumers are clearly saying.
Because they care about the future of our planet
To illustrate how critical social responsibility has become, previous research by Cone Communications found in 2017 that more than 60% of Americans hope businesses will drive social and environmental change in the absence of government regulation.
Nearly 90% of the consumers surveyed said they would purchase a product because a company supported an issue they care about.
More importantly, roughly 75% will refuse to buy from a company if they learn it supports an issue contrary to their own beliefs.
Another study on eco-consumers carried out among 2000+ internet users in the UK and US in 2018 by GlobalWebIndex revealed that:
80% explain their appetite for eco-friendly products because they “care about the future of our planet.”
79% because “they respect all living creatures and environment”.
This is true across all of the age groups in the reviews. We believe it’s also valid for banking products and services.
Beyond that, the positive “domino effect” of social influence and good habits is boosting sustainable consumption, in the long run.
Let us explain.
Psychological and social factors impacting eco-conscious consumer behaviour are numerous.
Raising self-esteem and sense of accomplishment,
Being a positive role model for family and friends,
Obtaining group influence,
Benefiting from the comfort zone of conformity and being perceived as "normal" by a specific group.
DO the right thing - A good cause that is solvable by individuals.
Supporting a good cause is certainly not new in retail banking. Donating with an affinity or direct-donation card is familiar for many.
What’s more specific about the Doconomy unique experience is that it:
Tackles climate change,
Presents a problem that is solvable by individual actors,
Empowers customers with clear feedback,
Helps them feel good at the end of the day.
After all, accountability is about delivering on a commitment for both parties.
We believe Doconomy’s initiative is one of the many remarkable examples of how banks, fintechs and their clients can drive change.
Thales is supporting banks in taking actions towards environmental-friendly practices and sustainability.
The company has developed a full set of tools that enables its clients to build a consistent green strategy that moves beyond empty environmental claims.
Our contribution includes every aspect of a bank card’s life, from green credit cards to eco-packaging produced by a manufacturer with a robust environmental policy.
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