ecolytiq Makes the Carbon Footprint of Purchases Decisions Transparent

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In order to really assess the ecological impact of our consumption, we need to have well-founded data. Supply chains lack the required access to information, leaving  consumers struggling to find information about the CO2 footprint of the individual products . Yet the necessary information for analysing our own CO2 emissions is already available: The answer is already in our bank accounts. With their innovative software for banks, ecolytiq uses precisely this data source, helping not only consumers make better purchasing decisions, but furthermore promoting sustainable investments.

With your business model, you want to contribute to consumers being able to make better purchasing decisions in terms of sustainability. Why is it currently so difficult to determine the impact (e.g. CO2 emissions) of my purchases?

David Lais & Ulrich Pietsch: Missing data! Our impact on the environment has never been a broadly recognized social issue. Until a few years ago, the individual impact on the environment did not matter at all to the masses, so why should I, as a company, concern myself with the issue? The first time consumers became aware of issues around sustainability was in the area of food. This was at a time when organic food was gradually becoming a trend. But even then, most consumers’ motivation was their health and not their own environmental impact.

So what we lack here is data at all levels. Over the last decades, many studies have been published on this topic, but very few of them take the consumer’s point of view. We have known the CO2 consumption of industries for years, but from a consumer’s perspective, this figure is still far too abstract. Even if I as a consumer am aware that almost 27 million tonnes of CO2 are caused by meat consumption per year (reference year 2016), I still don’t know how much impact I have with the steak I just bought. There are numerous studies that have investigated this topic, but just because meat consumption plays such a large role does not mean that we know the environmental impact of buying a new pair of shoes, for example. Then there is the problem of intransparent supply chains and the lack of mandatory reporting on the part of companies at the product level. The data is simply missing!

Can you briefly explain ecolytiq’s approach?

David & Ulrich: With pleasure! Our consumption, the way we live, travel, eat – simply everything has a direct impact on the environment. In our consumer-driven society, everything usually has a price and our consumption is reflected in our bank account transactions. This is exactly where we come in: We calculate the individual footprint of consumers based on their account transactions and help them better understand their own environmental impact. Our technology is not made directly available to consumers, but we offer our software to banks and financial service providers. They can develop sustainable financial products based on the account and credit card information and thus help consumers to make their shopping habits more sustainable.

Why exactly did you decide to use payment transactions (e.g. credit card payments and direct debits) as the basis for analyzing consumer-caused CO2 emissions?

David & Ulrich: Sustainability is an incredibly complex topic, and we need solutions that scale and awaken the interest of the general public. The will to do something has certainly arrived in many consumers’ minds. But where to start? Will my new meat-free meal plan have much impact at all – I haven’t eaten that much meat anyway – or can I perhaps achieve more by changing my electricity provider? How big is the impact of public transport on my travel preferences? What happens when I add it all up? Trying to calculate these things manually is simply not a viable option, but your bank account knows your habits and therefore your environmental impact. All of which is reflected in the form of credit card payments, direct debits and bank transfers.

How do financial institutions benefit from using your technology and making it available to their customers?

David & Ulrich: Sustainability is a social issue. Financial institutions and banks have the same problem as consumers: What is sustainable? Where do I get the information and data? In the financial world, sustainability means above all change in investments. Climate change is a problem that can only be solved collectively and banks dispose of an incredible treasure trove of data. We are helping to tap into this, while at the same time opening up a dialogue between banks and their customers. Banks help their customers understand their own impact on the climate, while customers help their banks invest in sustainable financial products that are relevant to them. In this way, customers become active investors and environmentalists, while banks do what they do best: Invest.

Your approach assumes a largely cashless purchasing habit in order to accurately analyse the individual footprint. Are you in favour of a cashless economy? How do you assess the risks of such a system in terms of data misuse? After all, it would make consumers largely transparent.

David & Ulrich: My smartphone, my social networks, my internet provider know much more about me than my bank. For some reason, we Germans love our cash and believe that it allows us to retain a certain anonymity. The sad truth is: we have long since lost the latter and using our cash will not be able to save our privacy. We should do much more as a society to promote an ethical and moral approach to data. Digitalisation brings with it exponential data growth, in volumes beyond our imagination. The handling of data is therefore the decisive factor, and we should all do more to promote this.

Fun Fact: Cashless payments are more sustainable than cash and are also faster, more efficient and have many more advantages.

The CO2 emission figure alone is a very abstract value for most consumers. How do you make these figures more tangible? What additional incentives and support do you give consumers for a more sustainable purchasing behaviour?

David & Ulrich: We make sustainability tangible. An individual CO2 value doesn’t mean much to consumers at first, that’s absolutely right. We show people what they can do to reduce their own environmental impact. We achieve this by making curated content available to bank customers, for example by providing easy-to-implement tips for everyday life, or we offer comparative values helping consumers to better understand the reported figure. For example, “I have to cycle x km to eat y”. In addition, we always offer the possibility of offsetting the personal carbon footprint, for example through specific, sustainable investments at the bank, or by planting trees. Although the latter can be helpful, it is certainly not the ultimate solution.

How do you deal with the so-called “rebound effects”? For example, many people tend to save CO2 savings in one area, while they “reward” themselves for in another area (for example, saving electricity very conscientiously, but treating themselves to a plane trip in return). Or they consume more than they need, precisely because the product is ecological. They think: “If the clothes are FairTrade, I can order several pieces of them right away and feel good about it!”

David & Ulrich: The “rebound effect” occurs primarily because we have a “feeling” for our environmental impact. At ecolytiq, we create constant transparency, which means I can only calm my conscience to a limited extent by switching to a sustainable electricity provider, after all I can now see the precise impact of this change vs. the flight I just booked. This allows me to better reflect on my own actions, which leads to a quicker learning effect. This benefits both me, and the environment.

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Which areas of consumption are the most effective levers for individuals to reduce their own carbon footprint?

David & Ulrich: Basically, you can say that just being aware that every consumption decision has an impact on my carbon footprint is a big lever. One of the easiest way to reduce your impact, is to book a “real” green electricity tariff. In addition, savings can be made in areas where personal behaviour plays a major role. For example, reducing the room temperature per degree Celsius can result in up to 10 percent savings in CO2 emissions from heating. The difference between a meat-based and a plant-based diet reduces the footprint by up to 50 percent. In the area of mobility, change is often difficult, yet choosing a train ride instead of a domestic flight can also be a big lever and a 90 per cent reduction in the footprint for one trip.

Your concept is primarily focused on the ecological impact of consumption decisions. Are there any other approaches or plans to make the social impact (e.g. working conditions of production sites) transparent? Can this be expressed at all with simple key figures?

David & Ulrich: This is a very good question and a super exciting topic! This is unfortunately an area with even less data and transparency than in the area of CO2 emissions. We are already developing the next key figures and are always looking for partners who can help us to ensure more transparency at all levels. The next topic for us will probably be water.

You also focus clearly on consumer responsibility. Even though they play a central role in social change, companies and governments also have to actively face up to their responsibility. How do you see the interactions between these different social actors and how much can we actually achieve in our role as consumers, given the unequal distribution of power and information?

David & Ulrich: As already mentioned, we live in a world driven by consumption, which at the same time offers a decisive advantage: The demand regulates the supply. This is the biggest and most effective lever we have to really change things. The power lies completely with the consumers and the economy will follow – the oldest law of our “modern economy”. Of course, policymakers have to create the right framework and businesses have to proactively push the issue. Unfortunately, it seems that our politicians would much rather follow the economy than take care of social issues. But there’s hope: we may have lost some power as citizens, but not as consumers!

What is the story behind the founding of ecolytiq? Who are the people behind it?

David & Ulrich: ecolytiq was born out of a deep belief and a realisation: Every purchase has an impact on the environment and electronic payment transactions can make this visible. We believe data should not be used for profits, but for driving positive change in the world.

 

This interview was originally published by nachhaltigejobs.de , authored by Charlotte Clarke, and has been translated from German to English.

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