Westpac offers carbon footprint tracker to 2.5m customers

Millions of customers will be able to track their carbon footprint based on their spending habits as the bank vies for a stake in the nascent green lending market.

Westpac’s Carbon Footprint Tracker will give customers high-level insights into the carbon footprint associated with everyday purchases, the bank said. Picture: NCA NewsWire / Damian Shaw

Westpac will offer millions of customers using its banking app the ability to track their carbon footprint based on their spending habits, as it vies for a stake of the nascent green lending market.

The bank will today start a gradual roll out of a tool, powered by carbon footprint fintech COGO, empowering 2.5 million of Westpac app customers to make more environmentally friendly choices, it said.

The launch follows Westpac‘s recent announcement that it will launch “green home loans” in response to the Albanese government’s push for consistent clean energy standards and home ratings.

“The Carbon Tracker is a great conversation starter that encourages our customers to consider the carbon emissions from their eligible Westpac accounts,” said Westpac sustainability officer Siobhan Toohill.

The tool will estimate customer’s carbon emissions tracked from their spending, based on aggregate industry categories such as home energy, car fuel, or groceries.

“Our research shows Australians are increasingly concerned about sustainability. However, there are knowledge gaps that prevent people from engaging in more sustainable behaviours,” Westpac consumer and business banking chief executive Chris de Bruin said in a statement.

“The Westpac Carbon Footprint Tracker will give customers high-level insights into the carbon footprint associated with everyday purchases, such as takeaway food, transport, and groceries.

New Zealand-based COGO has partnered with several global banks to provide similar capabilities, including NatWest – formerly known as the Royal Bank of Scotland – in the UK, as well as Commonwealth Bank and Suncorp in Australia.

It is engaging with other big and small lenders locally and in New Zealand to give them access to their platform.

Commonwealth Bank started rolling out a similar COGO-enabled feature in a pilot in October 2021, and fully integrated into its app in August 2022.

Neither CBA, nor COGO could say whether the feature was influencing consumer’s as intended yet, but said that close to 300,000 CBA customers had “engaged” with the tool.

Suncorp, which rolled out an account with the feature in partnership with COGO last October said the bank was in the early stages of engaging with customers about the feature of its Carbon Insights account.

Based on the NatWest experience however, COGO’s founder Ben Gleisner says “there are early indications that there are significant carbon savings that are being driven by the tracker”.

He said Westpac would provide more personalised prompts and tips on how to reduce their carbon footprint based on customers’ actual spending, not just “generic” tips.

He expected a take up rate of about 10 per cent, based on COGO’s experience at other banks.

Westpac customers will be able to compare their estimated footprint with Australian household averages and will see a comparison to their monthly average and the previous month’s total.

“We’re on a path to reduce our own direct footprint, and as part of the Net Zero Banking Alliance we’re also continuing our work to align our lending portfolios with net zero emissions by 2050,” Ms Toohill said.

The bank’s touted “green” mortgage will offer discounted interest rates to customers that meet environmental standards. That followed bigger rival Commonwealth Bank, which started a “green loan” pilot in 2021 that has been scaled up since then.

In 2012 Westpac also launched discount car loan offers for hybrid vehicles.