Beyond investing – how the financial sector can achieve holistic sustainability
This makes it a clear call to all industries to redouble their efforts to ‘act, not react’ to have a positive impact on the environment – in particular the banking and financial sector, which plays a crucial role in influencing global consumption and production patterns, and finance the transition to climate-resilient economies.
The launch in 2020 of Australian roadmap for sustainable finance demonstrated the sector’s understanding of its influence on environmental impact, and it has targeted a goal of zero net emissions by 2050. However, many long-term strategies will not be implemented until 2030, which understanding consumers of financial products and their lasting impact in the meantime. To close this short-term gap, industry players can collaborate with partners who manufacture sustainable products, as well as adopt practices, programs and practices. initiatives that create a visibly positive environmental impact. Among the flagship programs is the global campaign with the UNEP (United Nations Environment Program) which urges everyone to eliminate the use of microplastics and stop the excessive and unnecessary use of single-use plastic to fight against plastic pollution.
Areas of fintech and digital payments for growth, innovation and collaboration
Digitization and e-commerce have seen surges in the ANZ region, which has sparked widespread adoption of digital payment solutions. With Australia projected at 98 percent cashless by 2024, it is an opportunity for the sector to adopt sustainable financial technology (FinTech) and to innovate customer-centric products that also reduce climate impact.
For example, although 47 percent of Australians already use a contactless form of payment, debit card use remains popular. This leaves room for new innovative card services that integrate new payment technologies while using durable materials like recycled PVC for smarter but greener solutions. In fact, we are witnessing a shift in the ecosystem in favor of this trajectory; after Visa, recently in August 2021, IDEMIA recognized Mastercard End-to-end sustainable approach to the entire payment card lifecycle by certifying GREENPAY cards made from recycled plastics.
In addition to environmentally friendly cards, fully digital cards also offer new payment possibilities to consumers while providing more opportunities for service providers to deliver flexible yet environmentally friendly payment experiences. They are almost functionally identical to regular physical cards – except that they are displayed digitally on mobile apps, websites, or digital wallets – and can be generated to easily make single or multiple payments. By eliminating the need for physical card manufacturing and associated logistics, these cards help service providers meet their sustainability goals and reduce the overall environmental impact of the industry as they gain traction in the industry. whole world.
Other innovations such as improving customer onboarding experiences can also help both conserve resources and engage customers. A fully digitized onboarding process for credit card activation may incorporate a biometric security verification process or a simply pressing the card on the phone. Not only is this more convenient for the consumer, but the turnaround time is also shortened for him and for the financial service provider, resulting in better efficiency without compromising security. Without having to travel, dematerialization also allows them to reduce their environmental footprint.
Apart from innovation, banks and FinTechs can further maximize positive environmental and social impact by participating and collaborating in initiatives such as carbon offset programs. They can also extend their carbon commitment beyond product lifecycles by working with suppliers who have set up dedicated carbon commitments. Investing in carbon projects and partnering with social organizations is also an opportunity to create a positive social impact that goes beyond sustainability, and actively support other Sustainable Development Goals (SDGs).
Adopting a holistic “green mindset” is compatible with industry goals
While the financial sector has generally taken the investment route by offering green products to meet environmental, social and governance (ESG) objectives, some have expressed reservations that pursuing deeper ESG commitments could be inconsistent with profitability. However, it is increasingly recognized that this is not the case, especially since 92% of consumers expect their financial institutions to pursue green goals.
Additionally, the intersection of the modern customer’s desires for convenience and sustainability means that the industry can also achieve corporate social responsibility (CSR) results if it places ESG goals at the center of its agenda. Indeed, they will remain accountable to internal and external stakeholders who increasingly prioritize climate. In doing so, they can also help lead the sector towards the achievement of the SDGs.
With growing public sentiment, customer awareness, and attention to climate issues, Australian businesses that fail to rise to the challenge risk being seen as indifferent to the environment, and therefore potentially losing out against their competitors in the long term. The impulse is therefore not only to innovate with new products, but to form partnerships and symbiotic collaborations that have a holistic impact.
In the long term, finding ways to collaborate and reinvest in the environment should be the industry’s top priority. Not only can they mitigate climate risks and attract a larger clientele, but they can also have a positive effect nationwide. Ffinancial and economic ecosystems by creating a healthy and sustainable economy for the future.
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