Visa is one of the leaders of the electronic payments market, with its history spanning back to 1958 when Bank of America launched their first ever consumer credit-card program. It’s these credit and debit cards that most of us will know Visa for, but few of us truly know what exactly the company does. Therefore, the purpose of this review is to carefully look into what Visa does and dissect how sustainable its operations are. However, as a consumer, I want to consider the sustainability of the main product we engage with when we utilise Visa’s services, and that is obviously the credit card.
Overall, the operations of Visa concern providing an intermediary for financial transactions, bringing together various stakeholders. In doing so, Visa has been very committed to ensuring the highest level of corporate governance and compliance with regulations. In essence, this means ensuring that their transactions are safe and fair. Moreover, Visa is highly aware of its major social role, with their yearly reports providing direct information in regards to the UN’s sustainable development goals and how they play a part in the ‘Sustainable Payments Ecosystem’. The fact of the matter is that Visa has been placed in a very powerful and dynamic position. I say this because its main business activity is creating connections between consumers, institutions and governments. This allows Visa to touch countless important sectors in a large way and accelerate social and climate movements. This is something that I will later highlight in the transport and mobility sector where Visa has taken an intuitive approach to improving transport efficiency. In general, it becomes clear that Visa uses its influential role constructively and responsibly. However, when actually considering the physical product of the credit card, it’s clear that there is lots of work that needs to be done to reduce the carbon footprint of the payments services industry.
In this section I want to completely focus on the credit card itself, as I’m certain that few people truly understand the magnitude of credit and debit cards being issued each year. When looking at the USA alone, there were 1.1 trillion (yes trillion) credit cards in circulation in 2018, with Visa having issued 300 million that year alone. Inherently, 300 million is only a fraction of the total circulation, highlighting that credit cards have an extremely long shelf life. Despite this, if 300 million of these are pumped out a year by Visa, they surely must be made in a way that is sustainable and responsible? Unfortunately not. Credit cards that co-partner with Visa are made out of a plastic called Polyvinyl-chloride acetate or PVC for short. This plastic is generally highly toxic for our health, but is equally damaging for the environment. For starters, the base of the plastic is 40% petroleum, a fossil fuel which is becoming increasingly scarce. Moreover, the PVC production process emits multiple toxic compounds. Most notable is the vinyl chloride monomer which is a persistent gas pollutant. Not only does it pose risks to humans through chronic health hazards, but also infects natural water and land habitats.
Despite this sounding pretty terrible, it gets worse. Additives such as phthalates are mixed with PVC to increase its durability and plasticity. Obviously this helps the card function better and longer, but once the functional period is over, you will struggle to get rid of the card. Due to the additives and properties of PVC, a card would take roughly 400 years to biodegrade properly, meaning that the only realistic end of life outcome for a credit card is incineration. Like with the production of the card, incineration emits highly toxic gases such as dioxin and chlorine compounds, into the atmosphere. If we consider the fact that around 30 million kilograms of PVC are used for bank card manufacturing a year, the end of life emissions will be absolutely immense. In fact its pretty much equivalent to incinerating 150 Boeing 747’s worth of plastic a year. What makes this worse is that there are actually some decent alternatives, with start-ups like Tred having designed cards made entirely out of recycled ocean plastic. The issue is that the big-dogs like Visa and Mastercard simply can’t afford partnerships with companies like this and will therefore continue to use PVC cards for the longevity and low costs. Overall, the environmental damage caused by the bank card industry has really shocked me and I really hope it is able to change sooner rather than later.
In this section I’ll briefly touch on how Visa bank cards are made and then move into how Visa generally handles the environmental sustainability of its operations, which will obviously move away from bank cards and towards their main supply chain and facilities.
Bank cards are made through a series of compounding and moulding phases where molten plastic is pressed together in a laminate. Although it’s generally very technical, its best to summarise by saying that this requires a lot of machinery that uses a lot of electricity. In fact it’s an area in which lots of research has been undertaken to find ways of optimising electricity usage and minimise waste. Unfortunately in the mainstream the technique remains a massive task that prioritises price and time, leading to lots of wasted energy and material.
Having wrapped up on the tangible product offered by Visa partnerships in the bank card, I’ll now touch on the ‘balance sheet’ operations of Visa. When considering the sustainability reports of Visa, they are very transparent with their information on their facilities and business activities. Beginning with electricity, Visa purchases 100% of its electricity from renewable sources as of 2020. Although this is generally great, purchasing electricity requires transport which is a hidden cost in their statistics. If Visa really want to use renewable energy they should consider owning their own generation services. When we consider carbon emissions, Visa provides some flashy statistics and graphs that break down their scope by scope emissions. Undoubtedly, as a transactor, Visa’s main emissions are those produced by their partners and clients, meaning that 89% of their emissions fall into scope 3, for which they are indirectly responsible for. This makes Visa’s stats look worse than they actually are. This is because Visa displays fairly unchanged total emission statistics over the last few years, which is mainly due to the scope 3 emissions. In comparison, their scope 1 and 2 emissions from their employees and facilities has decreased year on year, nearing an 80% reduction from 2009 to 2019. What I’m saying is that when it comes to carbon accounting, Visa falls victim to its business model, as the bulk of their emissions are indirectly caused through their partnerships. The strength of their in house sustainability program can be further evidenced by their water wastage stats which has seen a 56% decrease in water usage since 2015. Perhaps the only area where I have genuine criticism is their waste disposal, where 43% of all of their waste is landfilled. For the UK, this is only marginally better than the land fill rate of the average household, standing at 46.2%.
When it comes to the quality of work and social responsibility at Visa, it is impossible to deny that they have an impressive collection of accolades and recognitions for their work-place environment. In regards to social progression and diversity, Forbes awarded Visa as the Best Employer for Diversity 2020, with Bloomberg backing Visa as a top company for Gender Equality in 2019. These accolades go hand in hand with transparent data of Visa’s pay equity and workforce demographics which suggest that Visa is one of the top companies for progressing women into executive roles.
As promised in the overview, I want to also touch on Visa’s initiatives in vertical sectors in which they have significant influence. For instance, Visa is very active in the mobility sector, with them having partnered on initiatives with city planners to make transportation systems more environmentally and logistically efficient. This has been especially prominent in London and Singapore. On top of these initiatives, Visa is extremely in touch with its overall social responsibility, which it showcases through a breakdown of their contributions to the UN’s SDG’s. Overall, Visa has integrated measures into their practices for 9 of the SDG’s, with multiple projects falling within each. It would take me far too much time to walk you through all of these, so all I can do is promise you that Visa are definitely aware of the key issues of social and environmental sustainability, and are doing their best to combat them.