“His idea was: why don't we use payment transactions to calculate carbon footprints, because transactions reflect everything we do?” - David Laisnow, co-founder and chief product officer, ecolytiq.
In the above sentence, David is referring to CEO and co-founder, Ulrich Pietsch whose vision was inspired by his children’s reaction after watching a documentary about climate change and its impacts. While working on a project for a European retailer with David, he thought that payment transactions could be translated into carbon footprint information.
Background
ecolytiq, founded in Berlin in 2020, has collaborated with Visa and the Cambridge Institute for Sustainability Leadership (CISL) to identify how payment networks can help achieve net zero emissions targets. To date, financial institutions using the ecolytiq climate suite have seen a reduction of users’ CO2 footprints by 13% [1].
With world impacts and concern about climate change, ecolytiq believes that consumers would search for and switch to a bank that provides tools to track carbon footprint and that institutions that offer Sustainability as a Service (SaaS®) products to customers can increase their share of wallet and customer spend and generate more revenue. Banks offering these products are engaged in sustainability by giving customers the opportunity to see their own transaction-level impact and how to improve their spending choices. Benefits include showing customers how they can invest in eco-friendly opportunities and receive credit card rewards for eco-friendly choices.
Products
The ecolytiq climate action infrastructure offers the open banking¹ and financial industry the ability to embed sustainable product offerings for customers. There are currently three solutions displayed below in order: ecoAware – transforms payment transaction data into understandable, personalized environmental impact information; ecoEngage – shares a library of information about climate topics with customers while helping financial service providers to better understand customers’ concerns; ecoAction – facilitates customers with ESG2 investing. Customers can potentially reduce their environmental footprints.
Transaction data is transformed into personalized information about a cardholder’s carbon footprint using calculations from the Open Payment Standard that is published by the Organization for Sustainable Consumption. The Open Payment Standard uses an open-source, constantly updated sustainability registry intended to produce the most precise data possible resulting in transparent results. Ulrich notes that due to the number of studies being produced every year, collaboration is necessary to achieve numbers. Ecolytiq turns the data into meaningful information based on country (fueled by nuclear or fossil), merchants and habits. Users are afforded the opportunity to see how a change of habit (dairy and meat intake for example) could change carbon footprint.
tink, an open banking platform and Visa Fintech partner, has also partnered with ecolytiq, to promote SaaS and empower consumers to reduce climate change impact. With tink’s open banking and real time transaction data, eqolytiq is able to have a more comprehensive view of customers’ expenses within the DACH region (Germany, Austria, and Switzerland) to determine CO2 impact and potential offsets.
Conclusion
Ecolytiq offers an API, an SDK and a White Label ready-to-use web app that can be customized to your brand. These sustainability products can be used at either an individual or business level. For example, CarbonPay, a Visa FinTech Fast Track member and carbon footprint offsetting platform, is one of ecolytiq’s first clients. Integration with ecolytiq took CarbonPay about four weeks and because of open banking, where banks and financial institutions agree to share data, no single company has control of the transaction data.
The services ecolytiq provides help engage individuals and banking/financial institutions may help increase climate awareness and make a difference in global climate change. There are many possibilities for use, can you add one?
Blog Written by guest contributor Carolyn Darity
Data Sources:
[1] https://www.ecolytiq.com/blog/what-is-climate-engagement
Definitions:
1Open banking – practice of securely sharing financial information between banks and other financial institutions.
2ESG – (Environmental Social and Governance) is the criteria used to measure the sustainability and ethical impact of an investment in a business or company.
