Started in 1970 as the environmental movement got organized, Earth Day is now more than a symbolic celebration, as environmental, social and governance (ESG) issues factor more and more into the financial decisions of tens of millions of Americans.
ESG is now central to planning for major financial brands to startups.
A prime example is J.P. Morgan Chase, which released Tuesday (April 19) its 2021 ESG report detailing efforts across its portfolio.
In November, Mastercard accelerated its “net zero” carbon emissions goal by 10 years from 2050 to 2040, coming two months after establishing its Sustainability Innovation Lab.
It’s emblematic of how ESG is becoming business as usual as part of the next normal.
Here we look at two areas where sustainability is impacting payments and adjacent industries.
See also: Grover CFO Says Rent-A-Tech Accelerates Shift to Circular, Sustainable Economy
reCommerce and the Circular Economy
As a new generation of consumers deeply concerned about climate change and environmental issues vote with their digital wallets, what’s old is new and again from fashion to furnishings.
The apparel and footwear verticals have long taken heat over environmental issues. Combined with current inflationary pressures and increasing consumer interest in “pre-loved” fashion styles, this is becoming a key focus for all stakeholders in the broader fashion sector.
While the reCommerce trend roars on in marketplaces and eCommerce sites, major brands want to keep that profit potential under their own roof, leading to a push for in-house resale.
In April, PYMNTS reported on a slew of Resale-as-a-Service (Raas) moves among major apparel brands from Oscar De La Renta to Yoox Net-A-Porter. Target also debuted a page on reCommerce site ThredUp in March, including of women’s and kids’ apparel and accessories.
Read more: More Fashion Retailers Take Resale in-House to Control Experience, Data and Dollars
Footwear firm Merrell announced its Merrell ReTread program in April, “a multinational product takeback and resale program … which will save 300,000 pairs of footwear from landfills.”
Calling it a “first of its kind program” in economy footwear for the circular economy, Merrell said: “Once received, the footwear will be repaired and refurbished for resale, broken down for use in new products, or recycled for alternative uses.”
Home décor reCommerce platform FloorFound noted on its website: “The EPA estimates that over 9 million tons of furniture (or 18 billion pounds) goes to landfill every year. Over 2.1 million tons of appliances are also disposed of. And, much of that waste is comprised of like-new open-box items.”
FloorFound partnered with sustainable furniture manufacturer Inside Weather in February, “diverting nearly 10,000 pounds of sectionals, sofas, and side chairs from landfills” per an announcement.
See also: 70% of Consumers Say Addressing Climate Change Is a Key Issue, Fueling Resale Growth
A Second Life for Plastic Cards
For all the love we bear payment cards, the environmental impact of all that plastic is being targeted by several players large and small in the greening of card payments.
On Thursday (April 21), Bank of America committed to having 80% of its debit and credit cards made from recycled materials by next year.
In that announcement, Mary Hines Droesch, head of consumer and small business products at Ban of America said: “Shifting to a recycled card product is another step toward a more sustainable solution which will help foster a circular economy. We are committed to incorporating sustainability throughout our business.”
Bank of America said it issues 54 million consumer and commercial cards yearly, estimating a move to mostly recycled plastic will “help to reduce more than 235 tons of single-use plastics, based on its annual card issuance. The company also anticipates that switching to recycled plastic for its credit and debit card portfolio will reduce greenhouse gas emissions, energy and water usage.”
In a Tuesday (April 19) letter published on Mastercard’s website, CEO Michael Miebach said the company is expanding its program of linking employee bonuses to achieving ESG goals after piloting the effort in 2021 that “met or exceeded” carbon neutrality, financial inclusion and gender pay parity goals.
See also: Mastercard Introduces Eco-Friendly Card Badge and Recycling Program
American Express also redoubled its focus on ESG initiatives in April and announced: “The company’s goal is to have the vast majority of plastic cards issued by American Express be made of at least 70% recycled or reclaimed plastic by the end of 2024, which can help avoid nearly 160,000 pounds of virgin plastic from being used annually.”
Under its Card Take Back program, American Express said it has recycled 1.3 million plastic cards since 2019.
We’re always on the lookout for opportunities to partner with innovators and disruptors.
Learn More