- The Payments Association calls for a standardised framework to measure and reduce carbon emissions across the digital payments value chain.
- The initiative seeks to align sustainability with commercial goals, addressing challenges like inconsistent data and complex ecosystems.
What happened: Standard framework proposed to track carbon emissions
The Payments Association, through its ESG Working Group, released a report emphasising the need for industry-wide collaboration to address the environmental impact of digital payments. While individual transactions may have minimal emissions, the scale of the industry amplifies its environmental footprint.
The report advocates for a standardised approach to measuring carbon emissions, involving stakeholders across the payment value chain and integrating sustainability with commercial strategies. However, progress has been slow, with research hindered by challenges like inconsistent metrics and complex data ecosystems. A Lloyds Bank case study highlighted the difficulty, taking 15 months to establish initial data points.
Tony Craddock, director general of The Payments Association, stressed that standardised measurement frameworks are essential for meaningful action, benefiting shareholders, customers, and the environment.
Also read: Navigating environmental and regulatory compliance: Essential steps for businesses
Also read: Understanding your carbon footprint: A guide for businesses
Why it’s important
Digital payments are a cornerstone of modern economies, but their environmental footprint cannot be ignored. Developing a standardised framework for carbon measurement is critical to drive transparency and actionable strategies across the payments ecosystem.
This initiative highlights the growing importance of aligning environmental, social, and governance (ESG) goals with business strategies. By addressing challenges like inconsistent data and ecosystem complexity, the payments industry can lead the way in sustainable financial practices. Moreover, the collaboration between regulators, institutions, and businesses fosters innovation that benefits both shareholders and the planet, setting a precedent for other sectors.
