The Footprint Insight feature is being made available to clients who currently use the bank’s Insight function, which groups their income and expenditure by spending category.Footprint Insight offers an estimate of the CO2e emissions of a client’s overall spending. This is determined using monthly expenditure per spending category like ‘groceries’, ‘fixed costs’, and ‘shopping’ and is then multiplied by a specific emission factor.
Users will also be provided tips on managing their carbon impact through push notifications and will reportedly be able to see how their footprint compares with the Dutch national average.
The introduction of the pilot, which will be used to obtain vital feedback on customer use of the app, has been announced after a collaboration by Cogo with ING’s innovation accelerator, as one of the year’s ING Labs Brussels cohort of startups, announced in April of 2022.
With the initiative from ING, and previous launches at NatWest Bank, TSB, CommBank, and ANZ among others, Cogo’s management noted that it is now on track to achieve its goal of having more than 3 million clients using carbon footprint management features by the end of the year.
The building society’s 70,000 current account customers are now being encouraged to download the Cogo app and link up their Cumberland account in order to give them an accurate picture of how their spending impacts the environment – covering financial transactions, investments, and everyday purchases.
The app will give clients suggestions on how to lower or offset their carbon footprint based on their personalised spend. Cogo has an algorithm that’s able to calculate the carbon emissions of all transactions on an account.
In order to calculate an individual or household’s carbon footprint, Cogo analyses the banking data and matches transactions to a particular industry. It then tries to estimate the carbon footprint of that transaction using secure Open Banking data.
The prominence of environmental, social, and governance (ESG) issues and the market demand for greater insights are reshaping requirements for disclosure and analytics. Customers, investors, and other stakeholders are seeking to learn more about a company’s ESG track record, while companies are looking to dig deeper on their strengths and weaknesses to act.
Climate change matters for central banks. It is not only an existential threat to civilisation, but it also entails severe risks for the economy.
To secure a liveable future, the European Union is committed to achieving climate neutrality by 2050. This will require enormous investment and innovation, and it has implications for inflation during the transition phase. It also makes parts of the capital stock redundant and creates financial risks.
Studies have estimated that 70% of CO2 emissions are driven by consumer behaviour. Banks and financial institutions can be key enablers in fighting climate change because they see and process all the transactions.
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