Carbon tracking firm Cogo is due to launch in New Zealand later this year. Photo / Getty Images
Carbon tracking firm Cogo is due to launch in New Zealand later this year. Photo / Getty Images
New Zealand businesses will, in coming months, be able to start measuring their carbon footprint using their banking data.
The founder and chief executive of Cogo, Ben Gleisner, says he has signed a deal with a bank in New Zealand that will enable his financial technology company to estimate businesses'carbon emissions based on their spending.
The Kiwi entrepreneur's technology essentially links an individual or a business' financial data to Cogo, should they wish for it to be used to estimate their emissions.
Speaking to the Herald during a government-organised trade trip to Australia, Gleisner said businesses can benefit from being able to demonstrate efforts to reduce their carbon emissions.
In addition to this being good for the environment, businesses can use their emissions profiles for marketing purposes and to secure the increasing amount of finance ringfenced for "green" projects.
Furthermore, new legislation will soon start requiring around 200 of New Zealand's largest companies to disclose their emissions.
The External Reporting Board (appointed by the governor general on recommendations by the commerce and consumer affairs minister), is expected to issue its first climate standard in December. It will require companies with market capitalisations of more than $60 million, large licensed insurers, registered banks, credit unions, building societies, managers of investment schemes with more than $1 billion in assets, and some Crown financial institutions to make disclosures alongside their regular financial reporting from 2023 at the earliest.
Cogo founder Ben Gleisner is in Melbourne with a delegation of 30 other New Zealand business leaders travelling with the PM. Photo / supplied
Around two million individuals around the world already use Cogo to track their personal carbon emissions via mobile banking.
Gleisner plans to launch Cogo's offering for businesses in Australia ahead of making it available in the United Kingdom and New Zealand.
He said an agreement has been reached with a bank in New Zealand, which he isn't yet able to unveil.
He said this should make Cogo's business product available by around October.
Ultimately, the former Treasury economist hopes New Zealand banks will follow their counterparts around the world in making carbon tracking available to individuals too.
Cogo has partnered with seven banks around the world, including CommBank in Australia (owner of ASB), NatWest in the UK and ING in the Netherlands.
"In 18 months, if you're a New Zealand tier one bank without a carbon footprinting product in your consumer app, you'll be seen as a real laggard," Gleisner said.
Cogo's offering also enables some users to offset their emissions by buying carbon credits. Gleisner said around 4 per cent of users have done so.
He recognised attaching estimated carbon emissions to types of spending involves some "pretty crude" math. However, the more users Cogo has and the more transactions it links to emissions, the more refined its emissions estimates become.
As for the issue of keeping the data secure, and Cogo being able to buy sufficient insurance cover for in the event of a data breach, Gleisner assured Cogo has a secure cloud data management system.
He pointed the finger at the slow pace at which banks in New Zealand are embracing financial technology.
He believed it came down to banks having too many other regulatory issues to contend with, and consumers not pushing them to innovate as much as in Europe, for example.
"I just don't see innovation being a big part of the banking sector in New Zealand over the past 10 years," he said.
Furthermore, government efforts to push banks to share customers' banking data, on request, have essentially stalled.
A former commerce and consumer affairs minister under the previous National-led Government, Jacqui Dean, told banks to embrace data sharing, known as "open banking", or risk regulation like their counterparts in the United Kingdom.
The thinking is that if banks loosen their grips on their customers' banking data, this will make way for more innovation, competition, and better services.
Kris Faafoi adopted the same line as Dean when he took her job, following Labour being elected to govern in 2017. Although neither Faafoi nor his successor David Clark have taken action to require banks to share their data with financial technology firms.
