Money talks

Money talks

Written by Dave Wallace
27th May 2022

The United Nations recently published its latest IPCC report, which at 3,000 pages long, is a hefty read.

Expectations about what is acceptable from an emissions perspective have to mature

Reporting on progress towards the target of limiting the global temperature rise to 1.5ºC agreed in the 2015 Paris Agreement, the headlines are not the best reading. We are on track for 3ºC.

One factoid that jumped out is that the wealthiest 10% of households contribute between 30 and 45% of climate-changing emissions. And sat at the top of this are the mega-rich.

The Institute for European Environmental Policy (IEEP) and the Stockholm Environment Institute (SEI) have calculated the carbon footprint of the wealthiest 1% of people on Earth will be 30 times greater than what is compatible with keeping below the 1.5ºC target.

The carbon footprints of some of the wealthiest people makes shocking reading. Roman Abramovich’s emissions are reportedly 33,859 tonnes per year, more than the entire nation of Monserrat. Superyachts and private planes are massive contributors (a superyacht produces 1,500 times more carbon than a typical car), and the sad truth is that more private yachts are being bought.

In 2021 alone, 887 superyachts were sold, more than 75% more than the year before. Bill Gates’s footprint is said to be a staggering 7,493 tonnes per year, and he is seen as a modest polluter by billionaire standards. He doesn’t own a yacht, but he has four private planes and a collection of helicopters. If you have a bored moment, it is worth Googling the carbon footprints of the rich and famous. Spoiler alert: the Kardashians feature prominently.

But it is not just the mega-rich that have an unfair share of emissions. If you live in a “developed country”, the chances are that your footprint is sizeable and far above most of the world’s population. The average per capita footprint is 23 tonnes in the UAE, 15 in the US and 7 in China, against 1.9 in India and 0.1 in Ethiopia.

So why am I writing this? Because ultimately, there must be a moment of reckoning, and things will have to change. Expectations about what is acceptable from an emissions perspective will have to mature. The average global CO2 emissions per capita is 4.79 tonnes, and to reach net-zero, this must be reduced to 2.3 tonnes. Most of these gains have to come from the more affluent countries, as that is where the most significant gains will be made. Citizens and organisations must play their part, so changing expectations and behaviours must be part of the solution.

There is enough awareness among consumers about climate issues and a desire to make changes. But many people are not sure how.

This is the same for small businesses and even some corporates.

Fundamentally, most people understand what climate change could mean. Whether they agree or not is a different matter. But several problems need to be addressed.

1) There is a fundamental lack of understanding of the targets and how those targets can be achieved.

2) Definitions and the ability to make comparisons quickly seem to be missing.

3) There is a lack of trust in what people read and built-in cynicism about companies’ claims.

4) For citizens and companies, there is a lack of standardisation in the data essential to inform, educate and drive decision making.

We are increasingly seeing banks step forward and play a role in filling these gaps.

I recently spoke with Norway’s DNB, which has recognised that measurement and climate data are a real issue and decided to address this with a data-led strategy.

It is working with the United Nations Environment Programme Finance Initiative (UNEP FI) to define climate targets. The firm is making sense of the new climate regulations to its benefit and that of its customers and is building a data platform for these customers’ ESG strategies. DNB is also developing an e-learning platform that will help inform employees and customers about the climate agenda.

It is also helping standardise and enable a broader understanding of the underlying metrics and data for ESG, and for that, it should be applauded. Its ability to support and influence at scale and, most importantly, provide information to drive behaviour change, will help benefit Norway’s and the wider EU’s climate goals.

Aiko Yamashita, DNB’s ESG data task force lead, says: “The idea of establishing a corporate-wide ESG data hub is a bold statement. It means we are fully committed to developing future-proof solutions to be at the forefront of ESG, an arena that is proving vital for DNB and our society in the years to come.”

NatWest is an example of another bank that has identified its role in helping with behaviour change at scale. It recently integrated the CoGo application into its UK banking apps for personal and small business customers.

David Lindberg, CEO, retail banking at NatWest, says: “We know that many people in the UK want to reduce their impact on the climate, and that to be able to change something in a meaningful way, you need to be able to measure it. Our use of CoGo’s expertise in carbon tracking in the NatWest app is a significant first step.”

In a pilot that was undertaken, the average user made a saving by committing to behavioural changes that use less carbon, e.g., composting, reducing meat consumption and switching utility providers. If replicated across all its 8 million customers, these gains would save 1 billion kg of CO2 emissions per year, the equivalent of planting 17 million trees.

Taking a data-first approach must be the most effective driver of climate action. Banks like DNB and NatWest provide use cases that demonstrate how FI’s can use their scale and infrastructure, validating why the banking industry is so well placed to help “save the world”.

About the author

Dave Wallace is a user experience and marketing professional who has spent the last 25 years helping financial services companies design, launch and evolve digital customer experiences.