Chitua Kalio of Giesecke+Devrient on making the payments ecosystem sustainable

FinTech Intel spoke with Chitua Kalio of G+D to discuss the impact of the payment sector on the climate, what G+D is doing to combat this, and what fintechs can do to improve their green credentials

Chitua Kalio is the global head of client services for the ePayments division of Giesecke+Devrient (G+D), a security technology company that provides products in four areas—enabling secure payments, providing trusted connectivity, safeguarding identities and protecting digital infrastructures. 

Founded in 1852 in Germany, the company started out by printing banknotes. It has a long history and is also very much focused on the future.  

FinTech Intel caught up with Kalio to discuss the impact of the payment sector on the climate, what G+D is doing to combat this, and what fintechs can do to improve their green credentials.  

Can you tell me about G+D and your role there?

G+D is a security technology company that has been around for more than 170 years. We offer a lot of different products across the board, from payments, both cards and digital, to banknotes, digital infrastructures and identities, and connectivity. 

I am responsible for client services in the cards and digital payments space. It’s basically a customer service department, but in a B2B context. And I am also on the Supervisory Board of our cards and digital payments business in the US. 

What sustainable initiatives does G+D have in place?

Speaking for the cards and digital payments part of the company, in general, our strategy has been to replace, reuse and recycle, and whatever environmental impact that cannot be avoided we aim to neutralise with a compensation approach.  

I am proud to say that we were the first in the industry to make a pledge to get rid of all first-use plastics from our card bodies by 2030.  

We are approaching it in a multifaceted way. One is with the product itself. We eliminate the use of non-sustainable materials. And we look at the whole lifecycle, including the materials we procure, how we produce and issue cards, and the resources that we use. Then at the end of the lifecycle when consumers dispose of their cards, we have recycling programmes in place. We are closing the loop in the circular economy.  

In the cards space specifically, we have a portfolio offering called Convego Beyond, where we give clients a choice between recycled plastic, ocean plastic and cards made from compostable material.  

Since the Paris Agreement on climate change was signed in 2016, more than 15b new payment cards have entered our ecosystem, and that number grows every year. 

Consumers have seen enough greenwashing and are challenging their banks to take real action. G+D can authentically support such efforts.  

What needs to be changed within payments, to make it sustainable?

I moderated a panel at Money2020 that talked about how financial institutions can avoid greenwashing. I think that’s the start of it. There needs to be an awareness and authenticity behind the actions of financial institutions and others in the industry.  

Sustainability, if not done right, is just a catchphrase or a gimmick. Financial institutions should have an awareness of their practices and build sustainability into their strategy in a credible way, so the claims they make can be backed up by data.  

Also, when it comes to compensating for environmental impact, we need to give consumers awareness about the choices and purchases they make, for example, by telling them what kind of carbon footprint they have.  

At Money2020, I was joined on stage by representatives of two eco-innovative companies that G+D has partnered with to provide a more holistic sustainable offering. One was the chief operating officer of Doconomy, which offers carbon footprint tracking. Banks can install its app in their banking apps, so consumers can see the carbon impact of their purchases.  

Also on stage was the European general manager from Patch, which allows consumers to invest in carbon offsetting projects.  

We need to involve all the players in the industry, from the service providers, like G+D who make the cards, the banks and fintechs, and also the end consumers. Awareness in all parts is key.  

There’s a lot of talk about ESG—what do you think is actually being done, and is it enough?

At Money2020, I saw how much sustainability was on the agenda in comparison to previous years. The tide is turning in the industry as whole and at key events like that.  

After G+D made its 2030 pledge, Mastercard made a pledge and so did Deutsch Bank. More companies are taking a closer look and starting to follow.  

How can fintechs avoid the greenwashing trap?

I would encourage them to challenge their suppliers, by, for example, checking where companies source their cards and the authenticity of those claims through third-party verification. 

At G+D, Mastercard has independently certified our Convego Beyond portfolio, and given us a Card Eco Certification, or eco-badge, which indicates 100% recycled material and adds to the credibility. It’s not just an internally produced statement that only we can prove. 

How do fintechs, governments and other organisations work together and towards a sustainable future?

Fintechs need to be aware of what guidance is coming from regulators and government bodies.  

Look at the latest definitions when it comes to greenwashing. In the UK, we have seen more of a regulatory crackdown on companies that are making false claims.  

Indeed, regulators play an important role. The UN sustainable development goals are driving the behaviour of companies that are adopting them. 

With the Paris agreement, we have seen cross-country collaboration. Regulators are taking steps to make it more prominent, but there is still a way to go. 

It’s not just about one thing, or just a card made from recycled plastic. It’s the card, the collateral, business practices, and the types of sustainable investment options available for customers. 

Finally, I think partnership will be an important accelerator in a lot of ways, to offer end users more opportunities, awareness and ways to offset their carbon footprint or invest sustainably. For example, G+D partners with Patch and Doconomy, which helps us to broaden our awareness and offerings to our clients and their customers. That’s an important value add of which financial institutions can take advantage.  

Image: G+D