The Ultimate Guide to Credit Cards
Tuesday, November 5, 2024

Everybody Wins When Banks Help Customers Understand the Carbon Impact of Their Spending

Financial Insights Can Encourage Climate Action
Mike Senecal

Writer: Mike Senecal

Mike Senecal

Mike Senecal, Staff Writer

Mike Senecal draws on more than 20 years of editorial experience to update CardRates.com readers on industry trends, business news, and best practices in budgeting and credit use. Mike has worked for decades in academic and trade publishing, including roles as managing editor and technical editor at the University of Florida and as contributor to finance industry publications, including Surety Bond Quarterly and Independent Agent, among others. Mike holds bachelor’s and master’s degrees from the University of South Carolina, and he enjoys bringing his years of academic and industry expertise online to help consumers of diverse financial backgrounds.

See Full Bio »
Close
Lillian Guevara-Castro

Editor: Lillian Guevara-Castro

Lillian Guevara-Castro

Lillian Guevara-Castro, Senior Editor

Lillian Guevara-Castro brings more than 30 years of editing and journalism experience to the CardRates team. She has worked at The Atlanta Journal and Constitution, Gwinnett Daily News, Gainesville Sun, and The New York Times, where she covered demographics, consumer issues, and the business and financial sectors. Lillian has a degree in journalism and communications from Georgia State University and brings her fact-checking expertise to ensure Digital Brands content is accurate and engaging.

See Full Bio »
Close
Adam West

Reviewer: Adam West

Adam West

Adam West, Managing Editor

Adam has interviewed over 1,000 finance experts since joining the CardRates team in 2016. He spearheads industry news coverage related to helping consumers achieve greater financial literacy and improved credit. He has more than 12 years of storytelling, editing, and design experience in print and online journalism and is most knowledgeable in the areas of credit scores, financial products and services, and the banking industry.

See Full Bio »
Close

Our experts and industry insiders blog the latest news, studies and current events from inside the credit card industry. Our articles follow strict editorial guidelines.

In a Nutshell: Cogo offers carbon tracking software to banks and businesses interested in turning discussion about sustainability into real climate action. Its message to the banking industry at the Money20/20 conference in October 2024 is that informing customers about the carbon impact of their transactions creates a win-win-win situation. Customers benefit because Cogo encourages them to economize on greener items. Banks benefit from developing closer customer ties around sustainability aims, and helping those customers access financing to achieve their goals. And the environment benefits because Cogo’s carbon management systems promote action rather than rhetoric.

What’s your life like when your day job is working within the government on climate change policy? Well, if you were Ben Gleisner around 2010, and you were an economist at the New Zealand Treasury, you “saw pretty slow action” — people coming and going, flying from one conference to another, striving mightily to do the right thing but never achieving anything close to a transformational impact.

Gleisner began to question whether his work would ever have any real, lasting benefit.  Instead of more talk, he eventually decided to leave his position to launch a company dedicated to driving positive climate impact.

Cogo is that company. It emerged in 2016 from Conscious Consumers, which Gleisner founded as a charitable organization connecting shoppers with businesses aligned with their values.

Conscious Consumers retooled under Cogo to acknowledge the major role of its innovative carbon footprint tracker. Their first app allowed users to connect their debit card and credit card accounts to understand the environmental impact of their spending and take common-sense steps to reduce it.

Cogo logo

Gleisner’s core realization was that we’re all consumers at the most basic level, meaning that the greatest impact most of us can have on the world is through our spending. After reaching tens of thousands of UK consumers through its app, the Cogo team realized the path to greater adoption was through banks and businesses integrating the technology directly into their platforms.

Cogo now reaches millions by working with many major banking partners around the world. Adoption in the U.S. and Canada, however, lags far behind that of Europe and Australasia.

The message to North American banks at 2024’s Money20/20 financial technology conference, held in October, is that the time is now to empower consumers with carbon impact insights. That’s because, Gleisner said, what’s good for households is also good for business — not to mention for the environment.

“Consumers reduce their carbon footprint by connecting to lower-cost ways of running their homes and vehicles,” Gleisner said. “Banks benefit because they can facilitate access to the many green lending programs and federal incentives to make those upfront costs cheaper.”

Tapping Into the Power of the Wallet

Saving by analyzing your spending and opting for greener products and services is like having a credit card rewards program with a social mission. Gleisner said the pivot to targeting businesses instead of individual consumers was about introducing the lowest friction solution possible.

It had been OK to connect exceptionally committed individuals — and there were many in the UK at the time — with resources aligned with their causes. It was much more productive to work through banks with a value-added service carrying multilevel benefits to their large and loyal audiences.

“It’s like a credit score around your financial health — people receive a scorecard of what their carbon footprint looks like based on all their spending,” Gleisner said. “We translate your everyday routines into a carbon footprint score and let you know how you’re tracking.”

Cogo Business Carbon Manager
Cogo’s Business Carbon Manager integrates climate impact information into banking apps.

Cogo’s technology — which is always free to end-users — performs the comparative analysis you would expect, letting bank customers know whether they’re trending up or down and whether anything unusual has cropped up.

Gleisner said the adoption lag among U.S. and Canadian banks is in part cultural, par for the course in markets that tend to bring up the rear rather than forge ahead. EU and Australasian markets also benefit from strong public demand for climate action.

“In many countries, there’s a regulatory requirement for banks to help their customers measure and reduce their emissions,” Gleisner said. “It’s a win-win from the customer’s perspective because getting off imported fossil fuels, putting solar on your roof, and using electricity from the grid for your car costs less.”

Gleisner thinks that’s the message North American banks ought to be conveying to their customers. Moving to a heat pump that’s three times more efficient than a gas boiler doesn’t have to be about achieving ultimate goals when it can be about pocketbook savings.

“What we want to say is climate change doesn’t need to be a costly exercise. It doesn’t need to be a political exercise. It needs to be just about saving the average customer some money on their power bills and helping you grow your loan book,” Gleisner said.

Behavioral Science Incentivizes and Rewards Action

Getting there requires deep insights into what makes people tick. Cogo’s multidisciplinary research team uses cutting-edge behavioral science theory to empower people and businesses to take action — because it’s in their best interest.

Gleisner said making that connection to practical results is essential because achieving the goal is imperative. As he prepared to venture to Las Vegas to attend Money20/20, Gleisner remarked on the increasing frequency and intensity of U.S. hurricanes as one example of the mounting challenges of climate change.

Personalized climate actions
Personalized climate actions help users predict and assess the impact of their behavior.

“It feels like a pretty important issue to solve, but to solve it requires mass behavior change,” Gleisner said. “It effectively requires all households, year on year, to reduce their carbon by 3% to 5%. You’re not going to get that with governments wandering around, subsidizing heaps of new investments in wind and solar.”

In short, Gleisner said, responsibility for our environmental future can’t fall just on our governments. To effectively bring down those footprints, any policy or initiative requires people to make changes in their lives.

That’s where behavioral science fits in. Given that habitual or unconscious behaviors drive many daily activities that contribute to our carbon footprint, behavioral science best practices can help people understand how their actions contribute to climate change in personal terms.

Goal setting becomes a motivational act rather than an indication of how far you have to go. Incentives and rewards based on previous behavior nudge users toward sustainable actions.

For example, Cogo’s technology might offer a ‘pat on the back’ to a banking customer when they jump on a bus rather than into a taxi. It’ll lay out the carbon benefit and may even propose embarking on a month-long commitment to avoid rideshares in favor of less impactful alternatives.

“It’s about motivating people through techniques marketers use to sell you things you probably don’t want to help you improve the climate,” Gleisner said.

Protect Your Bank for the Next Generation of Customers

Cogo is a Certified B Corp with an interest in larger environmental, social, and governance goals in addition to its responsibility to shareholders. It pays all staff a living wage far above the minimum wage, opens board meetings to the entire team, and maintains complete pay transparency.

Cogo even has a negative gender pay gap, meaning that the people in the business who are women earn more than men.

“I’m definitely not the highest-paid person in the company, for example,” Gleisner said. “Being a B Corp signals we’re it not just to grow the business, but also because we’re thinking about these other things.”

There’s no downside to putting these issues at the forefront. According to Cogo research, 75% of people want to know more about the environmental impact of their spending, and 62% support banks that can help them take action to reduce their carbon footprint.

Cogo-Bip partnership
Cogo partners with banks globally. Its partnership with UK credit card issuer NewDay enhances the latter’s Bip cardless credit service.

However, the politicization around climate change, especially in the U.S., has a discouraging effect on attitudes around climate change information — thus the utility of the Cogo solution. It turns out that green homes with wisely funded upgrades are not only cheaper to run but also better assets when it comes time to sell.

It’s that long-term value for the planet that keeps Gleisner’s eyes on the prize. He mentioned during our conversation that Cogo had recently launched a product in Australia to help homeowners decarbonize their properties. Customer demand drives green innovation in many markets.

“It really matters that we keep propositions in the market to attract the next generation of banking customers,” Gleisner said. “They are loyal, and they want their banks to provide these sorts of services.”

In the meantime, Cogo sees users taking tens of thousands of different actions daily to reduce their carbon footprints. These are changes that have come about through the app’s ability to reinforce good behaviors and encourage new ones.

“If you’re a bank or card issuer looking to provide climate information and support customers, think of Cogo as the tool that will help make it happen,” Gleisner said.