The world is burning. Can tech and Financial Services help solve the problem?
The effects of climate change will be all too clear in years to come, from record-breaking temperatures all over the globe to devastating floods and increasingly frequent freak weather events. It seems like every year, there is a different “once in 100-year event.” Luckily, we are the first generation that has a chance of doing something about it. So why aren’t we all clambering over each other to reduce carbon emissions, slow down, and stop climate change?
Well, where would you even begin?
Open opportunities
Open Finance is revolutionising how consumers access personalised financial services, but have you ever considered how this information can help the environment?
How people use their money can have wide-ranging impacts on the environment, both positive and negative. Some of these impacts are very familiar, while others are less obvious.
Day-to-day spending
Most people know that where they spend their money has an impact on the environment. We know that driving a diesel car creates more CO2 than charging an electric vehicle or that a vegan diet has a lower environmental impact than a meat-eating diet. However, there are limited examples like these, and they are relative comparisons. What difference does it actually make? How many trees would you need to plant to offset your carbon footprint?
By enriching Open banking transactional data with Carbon Analysis data, you can provide your customers with detailed insights into how each transaction contributes to their carbon footprint. This information can be presented in terms that resonate with people's thoughts about environmental impact. Hints and tips can also be provided to inform customers about how they can take simple steps to reduce their carbon footprint today and what impact this will have in the future.
This transparent, personalised data can empower consumers to make more sustainable choices daily. When consumers can see the carbon impact of their spending in real-time, backed by actionable insights and alternatives, it can radically shift their perceptions and habits.
A great example of how this can be used for bigger decisions is in car finance. It is already hugely beneficial to use Open Banking data to check affordability before approving a loan, so let’s assume the customer has already consented to share their Open Banking data with you. How amazing would it be if you could tell them the current CO2 impact of all the money they have spent on fuel over the last 12 months and how much lower that could be if they switch to using an EV or hybrid?
If people could see the impact that one decision could have, I have no doubt that the adoption of electric vehicles would increase.
The government are putting more pressure on companies to reduce their carbon footprints and phasing out fossil-fuelled vehicles, so why not help tackle both?
Investments and pensions
An area of carbon impact people are less aware of is the impact on how their money is invested. Where your investments and pensions are invested can have a huge impact on the environment, and making simple changes can have a profound effect.
“Research shows that over 75% of UK investors want their investments to have a positive impact.” - Josh Gregory, CEO & Founder, Sugi
But with so few people being engaged with their pensions and even fewer knowing the details about funds and holdings, how can we help make that positive change?
Moneyhub has partnered with Sugi to use the Open Finance investment and pension data to provide consumers with valuable insight into the carbon footprint of their investments and pensions. Once they have this information, greener alternative options can be provided, along with information on the positive impact of those changes. Often, making a positive change to where your money is invested can have a considerably larger impact than becoming a vegan or turning the tap off whilst you brush your teeth, and yet no one seems to be aware of that.
Why should I care, and what can I do?
As awareness of environmental issues continues to grow, financial services businesses are at an intersection of technological innovation and rising consumer expectations. Consumers are not only more environmentally conscious but also increasingly want to use brands that align with their values - 88% want brands to help them live more sustainably. Financial services have a unique opportunity to leverage Open Banking to significantly impact consumer carbon footprints while aligning with their own sustainability values and missions.
Moneyhub’s API recipe, Carbon Counter, shows you how you can leverage Open Banking data and enrich it with carbon data from Moneyhub’s partners, Cogo or Connect Earth, to engage with your customers in a much deeper and meaningful way to demonstrate your commitment to helping protect the environment and reduce everyone’s carbon footprint.