Payment card industry uses approximately 30 million kilograms of PVC annually. PVC being non-biodegradable, takes several hundred years to break down
The world of finance, often viewed through the lens of numbers and profits, is undergoing a significant shift towards environmental consciousness. The realisation that the financial sector can play a critical role in combating environmental challenges has led to the emergence of 'Green Banking.' This concept isn't just about green buildings or paperless transactions; it extends to something as ubiquitous as credit and debit cards.
Traditionally, payment cards are made of polyvinyl chloride (PVC), a plastic derived from petroleum and chlorine. The material composition of these cards, predominantly plastic, poses a critical concern. When looked upon individually, it might seem negligible until we consider the staggering fact that the payment card industry uses approximately 30 million kilograms of PVC annually. PVC being non-biodegradable, takes several hundred years to break down and its incineration produces toxic gases. However, change is on the horizon, driven by consumer awareness and industry innovation.
A recent survey by Mastercard revealed an eye-opening trend that a vast majority (95%) of surveyed consumers in India are not only aware of environmental issues but are also willing to take personal action. Many are adopting new sustainable behaviours like recycling more (41%) or being more aware of their purchases (41%). Another survey stated that 92% of consumers worldwide think their bank should actively contribute to preserving the planet and 87% think they should offer eco-friendly payment cards. This sentiment is particularly strong among younger generations, signalling a clear directive for financial institutions to take a stand, contribute to the global sustainability effort and remain relevant.
Innovating for a Greener Tomorrow
Using recycled plastic for payment cards has the potential to take 150,000 tons of avoidable plastic out of the ecosystem. With an aim to build an environmentally conscious ecosystem, card manufacturers are exploring sustainable alternatives to virgin PVC such as:
Holistic Approach to Green Banking
However, the journey to green banking doesn't end with the card itself. Eco-conscious banks are exploring other avenues to reduce their environmental footprint. This includes minimising packaging, using recycled materials and eco-friendly inks, digital delivery of PINs, establishing recycling channels for old cards, and partnering with service providers to track and offset the carbon footprint of purchases. Sustainable loyalty and rewards programs are also on the rise, aligning financial incentives with environmental stewardship.
This shift represents an opportunity for innovation and collaboration. By partnering with manufacturers, recycling companies, and environmental organisations, banks can not only reduce their environmental impact but also drive technological advancements and create new markets. Such collaborations can lead to the development of even more sustainable materials and practices, furthering the industry's contribution to environmental preservation.
The shift towards green banking and sustainable credit cards is more than a trend; it's a necessary evolution in our relationship with the environment. It's a clear indication that environmental concerns are no longer just the domain of activists or certain market segments but have permeated mainstream consciousness. Financial institutions, by adopting these practices, are not only responding to consumer demand but are also contributing significantly to global sustainability efforts. It is time for the industry to understand that it's not just about offering eco-friendly products; it's about embodying a philosophy that prioritises the planet in every aspect of our operations. Financial institutions that recognise and adapt to this ideology are setting themselves up for long-term success and relevance.
(Lucie Fonseca is Global Head R&D at Giesecke+Devrient.)