The green revolution is coming and Fintechs are in a unique position to affect change27. Oktober 2021 | Von Juliane Schmitz-Engels
Fintechs are well positioned to drive sustainability across sectors. They are in the fabric of society – be it in small personal transactions at a coffee shop or in business-to-business payments, financial services underpin every aspect of the economy.
By adopting more sustainable practices, fintechs can also influence the carbon impact of their clients. Banks and payment providers are an essential supplier for pretty much any business, giving fintechs a unique opportunity to breathe sustainability into the economy.
“Fintechs are able to influence the sustainability of not only their own company, but also of their clients and their companies, too. Fintechs can act as catalyst for significant change,” said Andreas Spengel, Senior Vice President Market Development at Mastercard.
Payments can make a big sustainable impact
The ability to affect change is most notable in payments. Payments act as commerce’s daily touchpoints with businesses and consumers, making businesses and fintechs in this space ideally placed to effect change.
In 2020 Mastercard launched its Priceless Planet Coalition to work with businesses, financial institutions, consumers and other organisations to fight climate change. The company has united more than 65 partners globally as part of the Priceless Planet Coalition, which aims to restore 100 million trees by 2025.
“Consumers want to be green, but often don’t know where to start,” Andreas Spengel explains. “The responsibility lies with us to educate consumers, while also providing solutions that are effortless.” Mastercard does this for example with its “pay & grow” initiative by merging banking with incentives, planting trees for every transaction by its card holders at 35,000 participating dealers in Germany.
Creating partnerships to help tackle climate change
Mastercard has a record of building partnerships with startup innovators having most recently collaborated with the Swedish fintech Doconomy to create the Mastercard Carbon Calculator. Mastercard is also supporting climate-focused fintech innovation through its Start Path startup engagement program.
“Human activity has undoubtedly created the climate crisis and it's ours to fix,” says Mathias Wikström, CEO at Doconomy. “Working with Mastercard and our partners across the world, we are confident that innovation will help us address it. By engaging a whole industry in enabling individual insights as well as collective action, Mastercard has redefined the role the financial industry can play every day in tackling the climate crisis. When others talking of the importance of Environmental, Social and Corporate Governance (ESG), Mastercard is putting it to work at the fingertips of the consumers.”
Mastercard launch new Sustainability Innovation Lab
Continuously within its operations, Mastercard invests in new technologies and resources to drive learning and insight within the global market to support sustainable choice across the payment industry. Recently the company announced the launch of its new “Sustainability Innovation Lab” in Stockholm, Sweden, which will become a hub of Mastercard’s global sustainability efforts and a concrete part of the company’s commitment to create a more sustainable and inclusive digital economy.
The Lab will spearhead the further development of the company’s portfolio of environmentally conscious digital products and solutions, as well as providing a hub through which we can engage with the excellent array of environmentally driven start up innovators across the world. With this, Mastercard will empower businesses and consumers to transform how they produce, distribute and purchase products and services, ensuring both people and the planet can thrive as the global economy rapidly digitizes.
Open Innovation to drive sustainable impact
The Lab will explore how technologies such as 5G, quantum, and advanced artificial intelligence can be applied to address environmental challenges. It will consist of an R&D Center focused on solutions for sustainable consumption and value chains.
The new initiative also offers a “labs as a service” platform, which aims to enable collaborations between Mastercard’s partners and their customers to create sustainable “shared-value solutions”.
“Fostering innovative solutions with practical applications is urgently needed to achieve global climate change goals,” says Kristina Kloberdanz, Chief Sustainability Officer at Mastercard. “As we continue to build a more sustainable digital economy, the Sustainability Innovation Lab will enable us to co-create a robust portfolio of environmentally friendly solutions, uniting everyone – businesses and consumers alike – in climate action.”