The Payments Association shapes the future of sustainable digital payments
The Payments Association, the most influential community in payments, has released a report examining how a standardised approach to measuring carbon emissions in the digital payments processing value chain is needed across the payments industry. The aim is to develop a framework that allows payments firms to meaningfully measure carbon emissions in the digital payments value chain, helping them build a more sustainable future.
Developed by The Payments Association’s ESG Working Group, the report, entitled, “Sustainable Digital Payments: Measuring Carbon Emissions in the Payments Chain“ illustrates that while the emissions from digital payments per transaction might be small, the industry’s scale makes a significant impact. Additionally, by understanding the environmental footprint of different payment methods, the industry can identify areas for improvement and promote greener practices.
This follows November’s COP29 event, hosted by Azerbaijan, which showed that current efforts to decrease global carbon dioxide, methane and other gases increase are all too slow and lacking impact.
The Payment Association’s Project ESG team has outlined the environmental benefits of digital payments and details a multi-faceted approach for measuring and reducing emissions in the industry, including a standardised approach to carbon emissions, industry collaboration across the value chain, the influence of regulatory development and connecting sustainability goals with commercial viability.
However, the study shows research has been slow to get off the ground, highlighting a case study from Lloyds Bank, which found it took 15 months to establish initial data points due to the complexity of the payment ecosystem. They identified challenges like the sheer volume of data points across physical and electronic payments and the inconsistency in measurements across different organisations.
As a result of the report’s findings, The Payments Association is calling for industry collaboration to develop a standardised framework for measuring carbon emissions in the payments chain. This will result in data integrity, comparability, and a reduction in the industry’s carbon footprint.
Tony Craddock, Director General of The Payments Association, said: “It’s a privilege to be part of a sector driving the conversation around carbon emissions management. We started this initiative in advance of any legal direction or international competition. We do so for the sole purpose that it will provide better payments and environmental standards for both consumers and the payments sector in the long run.
“Agreement on a standard way to measure emissions when people pay or get paid will provide a useful starting point for meaningful discussion. And it will help us decide what tools are needed to ultimately reduce carbon emissions, too. We believe this will contribute to increasing shareholder value, improving customer outcomes and reducing the environmental impact of payments.”
The report also provides resources and guidance for businesses to begin their journey towards sustainable digital payments. The Payments Association encourages all businesses in the payments industry to download the report and begin their journey towards sustainable digital payments.
For more information on the work and services of The Payments Association you can visit https://thepaymentsassociation.org/