# Cut, evidence, empower: How technology can help banks deliver on COP27 commitments
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2022-12-01
Category: NEWS
Category URL: https://financedigest.com/category/news
Meta Title: Banks' Carbon Impact: Cloud Reducing Emissions
Meta Description: Discover how banks can cut their carbon footprint using cloud technology and evidence their progress with hard data, with insights from Temenos and Microsoft.
URL: https://financedigest.com/cut-evidence-empower-how-technology-can-help-banks-deliver-on-cop27-commitmentshtml

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_By_ **_Kalliopi Chioti,_** _Chief Environmental, Societal and Governance Officer, Temenos_

While this year’s COP27 has concluded, the urgency and the need to continue to turn pledges and commitments into action, must remain.

Banks have much to contribute. Every year the banking sector [produces around 6.5 billion cards worldwide](https://www.thenational.ae/business/money/mastercard-urges-banks-around-the-world-to-issue-eco-friendly-cards-1.1053628), churning out [136,500 metric tons of carbon dioxide](https://www.creditcards.com/credit-card-news/mastercard-to-cut-plastic-pvc-from-payment-cards/) in the process. That’s the equivalent of flying from New York to Sydney over 80,000 times.

However, [banking’s challenge](https://www.financedigest.com/big-banks-can-be-challengers-too.html "Big banks can be challengers too") is not simply to reduce the carbon footprint of their value chain, but it must also evidence it with hard data.

**Cutting carbon**

Technology, specifically cloud, has a [central role](https://www.financedigest.com/inflation-fighting-central-bankers-air-climate-role-doubts.html "Inflation fighting central bankers air climate role doubts") to play in this process. Most [banks are already using cloud](https://www.financedigest.com/why-finance-professionals-must-bank-on-a-journey-to-the-cloud.html "Why finance professionals must bank on a journey to the cloud") to varying extents, however, there is scope for greater use. Migrating infrastructure and software from private data centres to public cloud hyperscalers means less hardware and floor space, less IT staff leaving behind their own [carbon footprints](https://www.financedigest.com/ecb-can-cut-carbon-footprint-by-shedding-bonds-of-biggest-polluters.html "ECB can cut carbon footprint by shedding bonds of biggest polluters"), and less electricity to run it all. Public cloud centres are increasingly built with energy efficiency as a priority, be it lighting, cooling, computer consumption or equipment degeneration.

According to data from IDC, [cloud computing](https://www.financedigest.com/the-value-of-cloud-computing.html "The Value of Cloud Computing") is capable of reducing over 1 billion tonnes of CO2 over the next few years when compared with legacy IT systems. Microsoft, who Temenos partnered with at this year’s COP27 summit, estimates that businesses using their cloud infrastructure generate up to [98% lower carbon emissions](https://www.wsp.com/en-US/insights/microsoft-cloud-computing-environmental-benefit-study) than operating their own. This is backed up by [data from IDC that suggests](https://www.financedigest.com/dollar-firms-after-u-s-labor-data-suggests-more-rate-hikes.html "Dollar firms after U.S. labor data suggests more rate hikes") cloud computing is capable of reducing over 1 billion tonnes of CO2 over the next few years when compared with legacy IT systems. The more banks that lean on public cloud providers and the SaaS solutions that run on them, the more the sector generates green economies of scale.

**Showing the evidence**

What’s also vital for [banks is being able to measure their impact](https://www.financedigest.com/how-will-open-banking-impact-the-customer-experience.html "How will Open Banking impact the customer experience?"). This is not just a moral argument. Regulations are reaching a point at which publishing data against ESG targets will be legally mandated. In Europe, the European Central Bank (ECB) and the Bank of England have already launched supervisory climate risk stress tests to assess how prepared [banks are for dealing](https://www.financedigest.com/seven-out-of-ten-uk-adults-aged-25-44-never-seek-advice-on-dealing-with-debts-despite-depending-on-the-bank-of-mum-and-dad.html "Seven out of ten UK adults aged 25-44 never seek advice on dealing with debts despite depending on the bank of mum and dad") with the shocks from climate risk. Meanwhile, initiatives like the UN-convened Net-Zero Banking Alliance (representing over 40% of [global banking](https://www.financedigest.com/credit-suisse-54-billion-lifeline-offers-limited-respite-to-global-banks.html "Credit Suisse  billion lifeline offers limited respite to global banks") assets), the Glasgow Financial Alliance for Net Zero and ​​the Principles for Responsible Banking add to the clamour for banks to evidence their progress.

[Banks must judge the technology](https://www.financedigest.com/6-technology-trends-banking-2019.html "6 Technology Trends for Banking in 2019") and software they deploy not simply by their promise to reduce energy and emissions, but by their ability to prove it. Recognising this, Temenos has developed a [carbon emissions calculator](https://www.temenos.com/news/2022/10/25/temenos-launches-carbon-emissions-calculator-on-temenos-banking-cloud/). It provides banks using the Temenos Banking Cloud with an actual [record of their CO2 emissions](https://www.financedigest.com/global-energy-related-co2-emissions-edged-up-to-record-high-in-2022-iea.html "Global energy-related CO2 emissions edged up to record high in 2022 – IEA"). It is a comprehensive measurement, starting with consumption data from Microsoft Azure and including every aspect of a bank’s operation carried out via our platform.

**Empowering everyone**

Consumers are not passive bystanders to the climate agenda. They are informed, passionate, and active. Increasingly people are [choosing banks](https://www.financedigest.com/5-things-to-consider-when-choosing-a-challenger-bank.html "5 Things to Consider When Choosing a Challenger Bank") that represent their values. A [survey](https://www2.deloitte.com/uk/en/pages/press-releases/articles/making-an-impact-esg-factors-are-a-priority-for-customers-when-choosing-a-bank.html) in the U.K by Deloitte found that three out of every five (61%) banking customers [say](https://www.financedigest.com/boes-bailey-says-bank-reforms-worked-but-questions-about-liquidity-buffers.html "BoE’s Bailey says bank reforms worked but questions about liquidity buffers") they want their banking provider to “do more to create a positive, social and environmental impact”. Moreover, EY has found that [84% of consumers](https://www.ey.com/en_gl/consumer-products-retail/make-sustainability-accessible-to-the-consumer) consider sustainability to be important when making purchasing decisions. [Banks are increasingly recognising this by enabling their customers](https://www.financedigest.com/visionary-banks-fight-the-blur-hybrid-computing-architecture-brings-a-faster-sharper-customer-experience.html "Visionary banks fight “the blur”: Hybrid computing architecture brings a faster, sharper customer experience") to track their own carbon footprint, enabling customers to take control and monitor their carbon impact.

With open banking, data can be [shared from banks](https://www.financedigest.com/bank-shares-rise-after-credit-suisse-rescue-eases-crisis.html "Bank shares rise after Credit Suisse rescue eases crisis"), and with banks. That gives [banks plenty of new ways](https://www.financedigest.com/5-ways-banks-can-compete-in-payments.html "5 ways banks can compete in payments") to please their environmentally conscious customers. They can report to each customer on the carbon impact of their spending, give them options to offset these carbon payments, reward them for transactions that positively contribute to sustainability, and offer them [investment vehicles](https://www.financedigest.com/sainsburys-pays-524-million-for-full-ownership-of-store-investment-vehicles.html "Sainsbury’s pays 4 million for full ownership of store investment vehicles") that align to their values.

**ESG Investing**

[Banks and wealth management firms must also recognise the value of technology](https://www.financedigest.com/transforming-the-retail-banking-ecosystem-its-all-about-technological-innovation.html "TRANSFORMING THE RETAIL BANKING ECOSYSTEM: IT’S ALL ABOUT TECHNOLOGICAL INNOVATION") in offering data backed ESG investments. According to analysis by Bloomberg, [global ESG assets under management are on track](https://www.financedigest.com/sp-global-acquires-firm-to-bolster-capability-to-track-commodity-shipments.html "S&P Global acquires firm to bolster capability to track commodity shipments") to exceed $53 trillion by 2025, representing more than a third of the projected total. To do so requires data capture and [management software](https://www.financedigest.com/struggling-banks-need-to-modernise-and-improve-software-quality-management.html "Struggling Banks Need to Modernise and Improve Software Quality Management") – not only to measure environmental figures, but also diversity, gender equality and corporate governance factors. [Bank and wealth management firms need Artificial Intelligence](https://www.financedigest.com/artificial-intelligence-in-banking-robo-advisors-and-beyond.html "Artificial Intelligence in Banking – Robo Advisors and beyond") (AI) to filter, score and model opportunities and portfolios. They need [software that can deliver](https://www.financedigest.com/new-global-relationship-between-reckon-software-and-myfirmsapp-delivers-closer-interaction-between-accountants-and-their-clients.html "NEW GLOBAL RELATIONSHIP BETWEEN RECKON SOFTWARE AND MYFIRMSAPP DELIVERS CLOSER INTERACTION BETWEEN ACCOUNTANTS AND THEIR CLIENTS") highly personalised customer experiences. It must be secure and compliant, and finally, it must be profitable too, for both [customers and the bank](https://www.financedigest.com/christmas-debt-hangovers-how-banks-can-help-customers.html "CHRISTMAS DEBT HANGOVERS: HOW BANKS CAN HELP CUSTOMERS").

All industries must recognise their climate impact, and the [banking sector](https://www.financedigest.com/big-ecb-hike-adds-fuel-to-the-banking-sector-fire.html "Big ECB hike adds fuel to the banking sector fire") has a large role to play. [Banks must recognise the necessity to reduce their carbon footprint and understand the value that comes with incorporating new low-carbon technologies](https://www.financedigest.com/the-rise-of-biometric-technology-in-banking.html "The rise of biometric technology in banking") into their infrastructure and empowering their customers to move towards a net-zero world.


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