Carbon Trackers, the Next Big Thing in European Banking Apps

When considering tools to help reduce their carbon footprint, few people will immediately think of their mobile banking app. And yet, a growing number of European banks are introducing features that allow users to monitor the carbon emissions their spending generates.

This month, Dutch banking conglomerate ING announced that it is to trial a carbon tracking feature with 350,000 mobile banking customers.

The new tool, called Footprint Insight, is being made available to customers who already use the bank’s Insight function, which groups their income and expenditure by spending category.

Footprint Insight will provide an estimate of the CO2 emissions in a customer’s spending, calculated using monthly expenditure per spending category multiplied by an emission factor. Customers will also receive tips on managing their carbon impact and be able to see how their footprint compares with the Dutch national average.

To roll out the feature, ING has tapped the New Zealand-based carbon tracking specialist Cogo, which has already built similar carbon trackers for other industry players like NatWest, TSB, CommBank and ANZ.

As proof that the green banking technology holds significant promise, NatWest announced in its recent earnings report that over 300,000 customers had accessed the feature in the first half of the year.

Read more: Mounting Losses, SMBs and Digital Banking Define UK Big Four Performance in H1 2022

Following a pilot of the technology last year, NatWest also revealed that the average user saved about 11 kilograms of CO2 emissions per month by committing to behavioral changes that used less carbon. If replicated across the bank’s 8 million mobile app customers, such changes could save more than 1 billion kilograms of CO2 emissions per year.

Related: Mastercard, Doconomy To Enable Carbon Footprint Tracking Of Purchases

Cogo, on the other hand, has reportedly said it is on track to achieve its ambition of having over 3 million people using its carbon footprint management features by the end of 2022.

Not to be outdone by the kiwi firm, the German startup ecolytiq is forging ahead with its own carbon tracking technology and has also picked up several bank clients in recent months.

Rabobank and Tatra Banka are among the financial institutions to have tapped ecolytiq to integrate carbon tracking into their banking apps, while Tatra Banka has gone a step further to introduce a scheme that rewards sustainable purchasing decisions.

Overall, part of the challenge banks face when calculating consumers’ carbon footprints is aggregating the necessary payment data to assess what they are actually spending their money on. To this end, ecolytiq has partnered with open banking platform Tink – a company with a track record of enabling banks and FinTechs deliver data-driven digital solutions.

Read more: Tink Expands Open Banking Services Across Europe

Financial Services and Net Zero

With financial institutions around the world committing to targets to achieve net-zero CO2 emissions, technologies such as in-app carbon trackers are powerful weapons in the fight against climate change.

With over half of the signatories to the UN’s Net-Zero Banking Alliance located in Europe, the continent is forging ahead with decarbonization in the financial services sector. In this area, consumer-facing tools can complement banks’ strategies to divest from high-emitting industries and support green financing as well as environmental, social and governance (ESG) investing.

Related: ESG Regulation at the Heart of EU Investment Landscape

What’s more, the increasing popularity of carbon trackers demonstrates that there’s a growing consumer appetite for green banking services and tools that help lower emissions.

For example, a 2021 survey by Meniga found that 62% of European consumers would like their bank to provide an overview of their carbon footprint, while 88% of bankers Meniga surveyed believe banks should play a role in raising awareness on the impact of consumption on climate change.

Moving from individual account holders to small businesses, NatWest launched a carbon planner for small and medium-sized businesses (SMBs) in June. The free platform helps SMBs work out their carbon footprint and then prioritize actions and targets to reduce it.

The British bank is also providing smaller businesses with green loans to finance solar panels, electric vehicles or heat pumps, NatWest Group Chief Executive Alison Rose told shareholders last month.

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