Here are the banks doing their part to reduce their footprint on the world and how it can help you and the environment.

What can you look for in a green bank?

Some banks are issuing cards made from recycled or ocean-reclaimed plastics, or from wood, corn or metal. Other providers go even further, allowing cardholders to offset the carbon footprint created by their purchases, or to donate to eco charities doing good around the world.

First Option Bank, for instance, makes its cards from recycled plastic, is a carbon-neutral bank and contributes to conservation partnerships on your behalf based on your monthly spending.

Ethical banking is also gaining traction, encouraging consumers to bank with providers that choose not to invest in harmful industries such as coal and oil. Bank Australia in particular is an awesome example of ethical banking in action.

Green Cards in Australia

What can you expect from green or eco-friendly cards in Australia? While there aren’t too many at this stage, it’s encouraging to see more coming on board in recent years.

Here are some of the green credit and debit cards currently available, and how they work.

A member-owned bank, First Option’s Low-Rate Visa Credit card is made from 85% recycled materials. Even more impressive is its commitment to being a sustainable bank that partners with landscape conservation programs to protect our natural environment and endangered species. First Option partners with Trace to be a carbon-neutral company and donates to its partner program on your behalf based on your spending.

Back in May, Gateway Bank launched a new plant-based debit card. The first of its kind from a bank in Australia, the Eco Debit Card is largely made of Polylactic Acid (PLA), which is created from fermented plant starches like cassava, corn or sugarcane. The only non-plant materials used in the card are in its magnetic strip and microchip.

Australian fintech Hay recently introduced its prepaid Hay Visa Card. Made from 85% biodegradable materials, the card is designed to remain durable while in your wallet, but will break down when in biologically active landfill. Hay points out that even its packaging is made from non-virgin sugarcane by-product, and is 100% recyclable, biodegradable and compostable.

What Are Green Cards Made From?

What makes a card ‘green’ depends on how it’s made, what materials it’s made with, and how easily those materials break down after the card’s been disposed of. Let’s look at a few examples.

In terms of the Hay Visa Card, Hay actually started out with the packaging, opting for a lightweight option to reduce its carbon footprint, while utilising a non-virgin sugarcane by-product that was not only recycled, but 100% recyclable and compostable. From there, the fintech looked at how it could create a card that was just as green.

The card itself is made from a material called SICOECO. This is a rigid PVC film with an additive that helps it to degrade in the right conditions, breaking down in a tenth of the time it takes standard plastic to break down. In saying that, the card is still perfectly durable, and is designed to last up to seven years. Hay provides information on how to properly dispose of the card on its website.

The gohenry Eco Card is made from a renewable material called polylactic acid (PLA). Unlike standard plastic, which is made from petroleum, coal and crude oils, PLA is derived from field corn. As such, it is fully biodegradable and non-toxic if incinerated.

Once the card has expired, the cardholder simply cuts out the chip and magnetic strip, cuts up the card, and puts it in the bin (there’s no need to throw it in with recycling). Using sunlight, soil and all the microorganisms that are found in soil and rubbish, the card will biodegrade in six months. Which, admittedly, is a nice, short time compared to standard PVC, which takes about 400 years.

Is It Worth It?

At the start of this post, we mentioned the fact that Australia has around 14.8 million credit cards in circulation, which equates to 74,000kg of plastic waste. Relative to the rest of the world, however, Australia is a small fry.

It’s estimated around six billion payment cards are produced around the world each year. This number includes credit cards, debit cards and bank cards, but would be further bumped up by other plastic cards such as gift cards. Putting that in perspective, that’s more than 30 million kg – or 30,000 tonnes – of payment card plastic created each year.

Changing the way these cards are made, whether by using recycled resources or biodegradable materials, could have a huge impact on our environment. Again, let’s look at a few examples to find out how these cards are making a difference.

• Gateway Bank says that it will take 65% less energy to produce its Eco Debit Card than a normal plastic card. As a result, it will generate 68% fewer greenhouse gases. Once expired, the card is designed to degrade at a faster rate, without releasing harmful toxins into the atmosphere.
• Similarly, the gohenry Eco Card is also a low-energy product to produce, and is composed of 82% bio-sourced renewable material, to help reduce plastic pollution. Going one step further, gohenry’s partnership with Eden Reforestation Projects allows new trees to be planted in Madagascar, Mozambique, Kenya, Haiti, Indonesia and Nepal.
  
  Working to reduce cardholders’ carbon output, this tree-planting process encourages reforestation and agroforestry (a combination of agriculture and forestry that works to increase biodiversity), while also helping to reduce poverty through the employment of local villagers.
• According to Unifimoney, for every one million payment cards it creates out of “ocean plastic”, more than 1 US ton of plastic will be diverted away from the world’s oceans, waterways, and shorelines. And with less plastic degrading in the oceans, there will be less microplastics created over the long term.
• In hopes of boosting the circular economy (reduce, reuse, recycle, recover), BBVA says it will prevent 21 tonnes of new plastic being created by issuing 7.3 million recycled cards in 2021. According to the bank, this will reduce CO2 emissions by 46.3 tonnes per year in the manufacturing process alone.
  
  As for the third ‘R’, BBVA now offers its customers in Spain the opportunity to recycle their old cards in branch. The bank recently announced that it had recycled 90,000 customer credit and debit cards in just three months. This recycling initiative has allowed the bank to reuse 450kg of plastic waste, breaking down about 90% of the cards’ raw materials to make new products.

A card is only 5 grams. What harm could it do?

Your credit card probably doesn’t seem like much of a cause for concern considering all the other plastic flowing through your life every day. But, that five grams becomes a much bigger problem when you consider just how many cards are in wallets, tossed into bins daily and eventually end up in landfill.

In Australia alone, there are around 14.8 million credit cards in use right now, which equates to 74,000kg of PVC (polyvinyl chloride: a notoriously difficult-to-recycle material). And of course, there’s also debit cards, prepaid cards and gift cards, all of which end up in landfill too. The use-and-toss nature of cards adds enormous burden to the planet’s collective plastic waste, especially since it doesn’t break down.

Going Cardless

While the steps being taken by these eco-driven card providers are to be applauded, none of the solutions they offer are perfect. Wooden cards, for example, are less flexible than plastic cards, making them more likely to break and need to be replaced. Recycled PVC is still PVC, so while rPVC cards give that PVC a second use, it’s still incredibly hard to break down after the card is thrown away.

According to Katie O’Hara, conservation manager at the Loggerhead Marinelife Center in Juno Beach, Florida, any plastic use, even if it’s recycled or reclaimed, can be problematic.

“Anything made from recycled or reclaimed ocean plastics is not truly recyclable or sustainable,” she said (1). “When plastics are recycled, they degrade, releasing nano and microparticles into the water used to recycle them. Plastic cannot be reused more than once or twice, and when it is recycled it’s still harmful to the environment.”

There’s also the environmental cost of creating cards to consider. No matter what they’re made of – whether that’s wood, metal, recycled or reclaimed plastics, or even biodegradable materials – creating, manufacturing and distributing these cards takes a toll on the environment.

So, is there another alternative? For all the good these green initiates are doing, it could be argued that you could remove much of the problems associated with plastic cards simply by getting rid of them. Yep, we’re talking about going cardless. By taking cards out of the equation, there is no need to manufacture them, distribute them, or deal with them once they’re no longer needed.

Fewer pollutants all round then.

And while Australia may be lagging in its green card offering, we’re pretty comfortable with digital and cashless payments. The 2021 Global Payments Report suggests the Australian economy will be 98% cashless by 2024, making Australia the fourth most cash averse country in the world, behind Sweden, Denmark and Hong Kong. (2)

Not only that, the report also suggests the use of mobile wallets here in Aus will double over the next four years.

The Rise of Digital Banks

So if cards can disappear, so perhaps can banks. Or their branches, at least. Enter, the neobank.

While you may or may not have heard of neobanks, this new style of bank operates digitally, rather than from a physical branch or office. Shunning the physical infrastructure and digital operating systems being used by financial organisations currently, these neobanks use technology developed from scratch, operating solely within an app on their users’ phones.

It’s worth pointing out that while we have branchless banks that operate digitally in Australia – such as ING, ME and UBank – these are not neobanks, because they utilise the infrastructure of their parent companies to operate. ING, for example, is owned by multinational Dutch bank ING Group, while ME is owned by a group of superannuation funds, and UBank is owned by NAB.

So, while these banks may offer great digital services, they are not classified as neobanks because they use the legacy systems of their parent companies.

However, there have been a number of neobanks that have gained their license to operate in Australia over the past couple of years. Some have been more successful than others. Within a relatively short space of time, Xinja Bank chose to exit banking and hand back its license, while 86400 was purchased by NAB. Volt Bank took its time to get on its feet, but is now in Beta, while Judo Bank and in1bank both seem to have hit the ground running.

What about digital banks? Unlike neobanks, digital banks operate digitally, while making use of the infrastructure of their parent companies. Examples include Up Bank, which is a subsidiary of Bendigo and Adelaide Bank, Douugh, which has partnered with Regional Australia Bank, and Hiver, which was recently launched by Teachers Mutual Bank. Other players on the rise include Hay and DayTek Capital.

Want to Go Green?

Back to credit cards. If you want to go green with your credit card, there are a number of ways you can go about it.

• Opt for an eco-friendly card. Unfortunately, there are no eco credit cards offered here in Australia. In terms of payment cards, Hay has its biodegradable prepaid Visa Card, while Gateway Bank provides its plant-based debit card. These could provide viable options for day-to-day spending when you don’t need to pay with credit.
• Use your digital wallet. While your card provider will send you a plastic companion card when you apply, it’s up to you whether you use it. Over time, with enough people using only digital payments, card providers should hopefully come round to offering an opt-in system for plastic companion cards.
• Talk to your card provider. Got a few minutes to spare? You could contact your card provider to talk about your desire to move away from plastic cards. Again, if providers realise there are enough people willing to go without a plastic card, they may consider phasing out plastic cards sooner rather than later.
• Offset your carbon output. You’ve probably seen airlines giving you the opportunity to offset your carbon output when you purchase flights. But, what you may not have realised is there are independent companies dedicated to carbon offsetting, which allow you to balance your personal carbon footprint by supporting carbon reduction projects.
• Be mindful when using your card. Using your credit card to buy, buy, buy may not be the best thing to do for the planet. Consider the cost of fast fashion and whether you want to support it, and think about what kind of carbon footprint you are creating when buying stuff online you don’t really need.
  
  If you’re unsure about how this might work, check out the Mastercard Carbon Calculator, a tool designed by Mastercard and Swedish fintech Doconomy that allows consumers to calculate the carbon footprint of their shopping habits.
• Donate to green causes. Outside of Australia, there are credit and debit cards that allow cardholders to automatically donate to green causes when they use their card. The previously mentioned card from Tomorrow puts its interchange fee towards climate projects. So far, this has allowed cardholders to protect 91,706,279 m2 of rainforest and 15,470,234 trees, while offsetting 23,453,660 kg of CO2.
  
  While there are no credit cards in Australia that allow you to automatically donate to green causes, it’s pretty easy to choose a charity that appeals to you, to then donate direct. If you have a rewards credit card, there is also the option to donate your points to a green charity partnered within your rewards program.
• Opt for an ethical bank. Financial providers considered ‘ethical banks’ choose not to invest or lend to industries that cause harm, and instead focus on doing good. By choosing a card provider with higher ethical banking standards, you can support green causes, while holding back support from industries that cause the planet harm.

As Rene Thejsen, Head of Cards and Consumer Payments at Danske Bank says, “We’re well aware that our more eco-friendly payment cards aren’t going to solve the world’s climate challenges, but they are a small step in the right direction.” Overall, it’s all about steps. What may seem like little steps here and there, should add up to more substantial change over time.

Green Cards Around the World

Also in the UK, finance services company Tred recently released its debit card made from recycled ocean plastic. What sets this card apart though, is the fact that it’s paired with an app that tracks the cardholder’s carbon output based on their spending. Cardholders can choose to offset that carbon output via a certified Scottish tree-planting scheme.

Designed for kids, the UK’s gohenry Eco Card is a sustainable debit card that’s not only made from plants, but also plants a tree when it’s first used. The card itself is made with biodegradable PLA, meaning 82% of the card will decompose in landfill. And, having partnered with Eden Reforestation Projects, gohenry ensures a tree is planted in celebration of the first time every Eco Card is used.

While it is yet to launch, UK fintech TreeCard has had plenty of interest in its new wooden card. Once launched, the card will allow users to link their bank account to the TreeCard app, to then route their spending through the Mastercard-issued TreeCard. From there, a portion of the card transaction fee each purchase generates is put towards tree planting projects run by green search engine Ecosia.

Over in Germany, fintech Tomorrow launched one of the first wooden cards on the market at the end of 2020. Aside from looking good in wood, this non-plastic offering also allows customers to offset their annual carbon footprint. As a B Corp, Tomorrow promotes ethical banking by only financing sustainable and social projects.

Meanwhile, in San Francisco, fintech Unifimoney announced the launch of its new card made with “ocean plastic” mid last year. Aside from being made with recycled plastic, the card – which is issued by UMB Bank – provides a donation to The Ocean Foundation each time it’s used.

But it’s not just fintechs and challenger banks getting in on the action. Here are some eco-friendly card offerings currently provided by the bigger players.

Back in October, the UK’s largest building society, Nationwide, announced its intention to switch to eco-friendly debit and credit cards made from recycled plastic, with the aim of saving 35 tonnes of carbon emissions each year. Nationwide, which issues 5.4 million cards annually, said it was the first major UK bank or building society to take such a step.

The provider also currently offers customers an in-branch recycling service for expired cards and has pledged to eliminate single-use plastics by 2025.

Around the same time, the largest bank in Denmark, Danske Bank, made a similar announcement, saying it was taking steps to phase out existing payment cards and replace them with new, more eco-friendly payment cards made from 86% recycled plastic.

Spanish multinational financial services company, BBVA, announced it would start offering recycled cards through each of the countries in which it operates – namely within Spain, South America, North America, Turkey and Romania – by the end of 2021. By 2023, the bank will phase out plastic cards completely, which can only be a good thing, considering it currently has more than 90 million cards in circulation.

1. https://www.nerdwallet.com/article/credit-cards/eco-friendly-credit-cards-what-do-they-promise-can-they-deliver/

2. https://www.techguide.com.au/news/internet-news/australia-on-track-to-be-almost-cashless-by-2024-as-digital-payments-soar/

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