Consumers Want to Fight Climate Change - And Their Banks May be the Key

Consumers are increasingly recognizing the imminent threat of climate change and its potential impact on their lives.

While they expect businesses and governments to take a stand, the question arises: Is consumer action still relevant in the fight against climate change?

In our view, yes. Consumer action remains crucial, but businesses need to help enable positive individual action.

Consumers Say We All Have to do Our Parts to Fight Climate Change

Consumers believe that businesses need to do their part, and 80% are holding them accountable to see that they take action. Corporate climate action is expected more than ever.

But despite all that, consumers still believe that THEY have a role to play as well. And the same action they expect companies to take, they want the option to take for themselves.

Consumers Care, But Change Can Be Challenging

Climate Action is Top of Mind - and Individuals are Ready to do their Part

Despite widespread consumer belief in the importance of government and corporate climate action, multiple surveys reveal that a significant majority of Americans are interested in making climate-conscious decisions.

  1. A Pew Research survey showed that 80% of consumers say they are willing to make changes in their own lives to fight climate change.
  2. From a list of seven social challenges facing the United States today, 23% of consumers selected ‘climate change’ as the most important challenge; the most of any of the challenges including ‘mental health’ and ‘gun control’.
  3. Another Pew Research survey showed that “nearly as many Americans say protecting the environment should be a top policy priority (64%) as say this about strengthening the economy (67%).”
  4. Furthermore, the importance of sustainability and climate action is growing. A 2021 PwC survey revealed that 50% of respondents claimed to have become more eco-friendly, compared to only 35% just two years prior, in 2019.

The Gap Between Willingness & Action

However, when it comes to actually making pro-sustainability lifestyle changes, consumers face a number of challenges. Chief among them is not knowing where to start, what actions would make the most impact, and how to make a difference without completely overhauling their lives.

Harvard Business Review explored this phenomenon in a 2019 survey, where they found that only 26% of surveyed consumers actually modified their behavior.

And Cornerstone Advisors found that amongst consumers classified as ‘climate conscious’, only half said they have actually taken some form of action to reduce their carbon footprint.

This gap between willingness to change and real consumer action emphasizes the need for convenient and user-friendly solutions that make sustainable choices accessible to everyone.

The first step? Helping consumers better understand their existing carbon footprint. Unfortunately, accessible and accurate customer footprinting exists in extremely rare supply currently.

Climate-embedded Solutions are a Vital Way Forward

Existing Carbon Footprinting Solutions Aren’t Good Enough

Many consumers genuinely want to reduce their carbon footprint but feel overwhelmed by the lack of knowledge on where to begin.

A quick Google search shows nearly 85 million web results for the search ‘carbon footprint calculator’. There are calculators from government websites across the world; from the UN; from public business; from private businesses. Which one should they choose, and are any of them accurate?

Calculating an accurate and comprehensive carbon footprint is extremely difficult to do without access to a significant amount of personal data; far more data than most calculators ask over the course of a ten-question survey.

And yet, the research shows that a significant majority of consumers (66%+ in Europe) support initiatives like carbon labels on products, showing a real appetite for accurate emission information when guiding their purchasing decisions. Ernst & Young found that 61% of U.S. consumers want more information to help them make better sustainable choices.

Banks Can Empower Consumers with Transaction-Level Carbon Emission Data

Instead of navigating the inscrutable maze of carbon footprinting, one place consumers look to for guidance is from their banks. Approximately 75% of Gen Zers and 70% of surveyed Millennials “expressed interest in using a carbon footprint tracker provided by their bank.

Why? Because unless consumers rely purely on cash, all of their daily transactions flow through their bank. This means that most, if not all transaction data is stored in one convenient location - making it simple to match that data with corresponding carbon emission data related to those purchases. With this setup, there’s no guesswork involved on part of the consumer.

Banks are in a prime position to empower their customers with personalized, accurate, and comprehensive carbon footprint information. If banks could pair data on spending habits with merchant-level sustainability data, they could offer consumers a deeper understanding of the environmental impact of their choices. Armed with this information, consumers could then make informed purchasing decisions and make whatever changes they see fit.

From Information to Action

Calculating an individual’s carbon footprint through transaction data is the key first step in empowering them to make informed, client-conscious decisions. After all, how and where we spend our money can make a significant impact on our individual carbon footprints.

Even with access to this data though, it may be difficult for some consumers to know exactly how they should best use that information to make the kinds of changes they are interested in making. Helping them figure this out is key; the Morning Consult found that 94% of U.S. consumers want carbon neutralization services to be based on their personalized carbon footprint, rather than generic baselines (Morning Consult, U.S. consumers, Q3 2022). The risk of information paralysis could be overcome through personalized recommendations, where machine-learning is used to analyze data in bulk.

With better, more personalized recommendations, consumers can make better choices for their lifestyle. And these spending choices do matter; they send a clear message to consumer businesses who are tracking their bottom line, as they may see their businesses shrink or grow as consumers vote with their wallets.

Continuing the Journey to Net Zero

The best place for consumers to begin their net zero journey is by understanding their existing carbon footprint, and making choices to lower it through informed spending.

However, the reality is that the world has not yet transitioned to a net-zero economy, and we are decades away from achieving that. This means that any purchase will contribute some amount of carbon emissions into the atmosphere. Reaching net zero solely through better spending decisions isn’t possible today.

Fortunately, that doesn’t mean that net zero emissions are entirely out of reach for consumers. The purchasing of high-quality, high-impact carbon credits can offset residual carbon emissions that as of today are unmitigable.

Moreover, a study from National Geographic found that 38% of Americans are willing to pay extra to neutralize the carbon footprints of flights through the use of carbon credits - which indicates a growing willingness amongst consumers to pay to neutralize their carbon footprint overall.

Just like with carbon footprinting though, there are a wealth of companies offering carbon credits for sale. Helping consumers navigate this growing but still-nascent market is a significant challenge. Nobody wants to purchase carbon credits that aren’t making a real impact, or are causing harm to local communities. This issue with quality is why in Aspiration’s Carbon Program, only one in five projects they evaluate makes the cut.

That’s where Aspiration and Clarity AI come in.

Aspiration + Clarity AI Help Make Climate Action Seamless and Simple

Aspiration and Clarity AI have partnered to make sustainable spending effortless for retail banking consumers by arming them with carbon emission data at the transaction-level. Their unique partnership combines high-quality, transparent data with high-quality carbon removal projects to help retail banking customers reduce their carbon emissions.

And the best part is, everything is right at their fingertips, and there aren’t any hoops to jump through to make it all happen.

This is how it works.

Use your debit/credit card

Customers go about their lives as usual, using the same debit and/or credit cards they always have.

As customers spend, Aspiration & Clarity AI’s climate solution is working seamlessly in the background to analyze spending data for the sole purpose of measuring an individual’s carbon footprint.

Review your shopping carbon emissions/footprint

A customer can then get insights into their shopping behavior thanks to the insights provided by Clarity AI. With emissions data coverage for over 40,000 companies, customers will have a better understanding of which retailers fit best within their lifestyle values.

This product can integrate seamlessly into a banking partner’s user interface on web or on mobile apps.

Understand your carbon reduction options

Armed with new insights into their shopping behavior, customers can use this information to help guide their spending decisions and enable them to shop more sustainably.

Even better, the product goes beyond just reporting. It can actually provide consumers with personalized recommendations to find ways in which they can reduce their carbon footprint while fitting their unique lifestyle.

Purchase high-quality credits to neutralize your emissions

Some customers might want to go beyond adjusting their spending habits to reduce their carbon footprint. As discussed, until we’ve transitioned to a net zero economy, there will always be some level of residual emissions.

For the customers that want to go farther in their sustainability journey, the product enables them to take further action by giving them the option to neutralize their carbon footprint by purchasing verified carbon credits from carefully vetted projects brought to them by Aspiration’s Carbon Program.

And of course, all of this is integrated seamlessly into the product, so that customers can take action right from their current banking website and/or mobile app.

The bottom line

Together, Aspiration and Clarity AI help empower consumers to make informed choices and take action towards a more sustainable future. Get in contact with us today.

Aspiration Sustainability Impact Services, LLC offers business-to-business services as described within the content of this page.