Published 14 hours ago
Created by MasterCard
Originally published by Mastercard Strive
There is a major environmental transition underway, and small businesses have a central role to play. An overwhelming 94% of consumers globally are calling for a transition to a green economy and are demanding that companies drive the critical changes needed to achieve global net-zero emissions. As the backbone of most economies, small businesses are key drivers of environmental sustainability and need support to meet rising consumer demand for sustainable goods and services.
Mastercard Strive recognizes the critical role small businesses play in achieving net zero emissions, so it partners with organizations around the world to support innovative technologies that enable small businesses to contribute to positive environmental impact. Partners test new ideas and develop socially inclusive innovations for small businesses that minimize impact on the planet and support communities already affected or will be affected by climate change.
In this post, we share more details about these initiatives, their successes, and lessons learned so far, where applicable. Overall, Mastercard Strive programs help small businesses reduce or eliminate single-use plastic packaging, facilitate their participation in the circular economy, and assess their impact on environmental and social issues.
Reducing and avoiding single-use plastic packaging
The United Nations Environment Programme estimates that around 85% of all single-use packaging becomes waste, ending up in landfills or as uncontrolled waste. In emerging markets such as Kenya, most small businesses are informal and typically sell household products in small packaging quantities (up to 50 grams) to reflect the financial realities of low-income consumers. However, this model ultimately harms both consumers and the environment: more frequent purchases of small quantities mean consumers pay more over time, and it also generates large amounts of single-use plastic waste.
In 2022, Mastercard Strive partnered with Novek to develop and test an IoT-enabled washing powder dispensing system for micro-retailers in Kenya. Mastercard Strive and Novek believe this technology offers the opportunity to eliminate single-use plastic packaging while increasing micro-retailers’ sales. During the program, Novek successfully built and tested dispenser prototypes, learning several lessons about building innovative technology for small retailers. They learned that regular touchpoints with training can encourage consistent usage among retailers and that it takes time to build trust with customers to access a product in a new way. Novek is now building a more stable machine that requires less maintenance and is focused on building partnerships that can support their growth.
In Indonesia, Mastercard Strive recently partnered with Alner. The company is deploying a reusable and returnable packaging system to replace single-use packaging for everyday items such as detergent, rice, cooking oil and more that are not recyclable. Consumers can use the packaging up to 20 times. Alner creates a sustainable consumption loop by first providing reusable packaging to fast-moving consumer goods (FMCG) companies and then incentivizing consumers to return the packaging through a deposit reward system. Through a mobile app, small businesses can monitor their business performance and environmental impact by tracking the amount of single-use plastic returned. Mastercard Strive is enabling Alner to further enhance its mobile app by introducing features that boost small business performance. These improvements include comprehensive training materials, peer-to-peer learning, gamification elements, digital payments and up-to-date market insights.
Participation in the circular economy
Thousands of tons of unnecessary waste are produced every year. The circular economy can minimise waste by keeping products, materials and resources in use for as long as possible, reducing the 80% of products that currently end up in landfill or incineration.
In the UK, Mastercard Strive has partnered with Tern Eco, a retail technology solution that uses circular models such as reuse and resale to support small businesses on their journey to a circular economy. Tern Eco’s enhanced solution enables smaller, time-strapped retailers to intuitively set up circular retail programs, offering greater flexibility and new features for repairs, upcycling and relisting products traded in for resale.
In addition, Tern Eco creates a comprehensive view of the entire product lifecycle using data generated and aggregated from retailers, consumers and product categories to identify new market and consumer trends. This data is shared with the wider retail community to promote circular models in other markets.
Assessment of economic impacts on social and environmental issues
Today, countries require large purchasing organizations to require their small suppliers to measure and disclose their impact on social and environmental issues. This is known as environmental, social and governance (ESG) reporting. Despite this growing demand, current ESG and sustainability data solutions are often inaccessible and expensive and do not meet the unique needs of small businesses. To address this problem, Mastercard Strive has partnered with Vested Impact, an impact assessment platform, to provide independent, cost-effective and data-driven impact assessments to micro and small businesses around the world.
Through Vested Impact’s platform, small businesses can leverage more than 300 million science-based research papers and data points to assess the impact of their products and services on global priorities such as climate, education, healthcare, and the economy. Small businesses gain access to a comprehensive AI-powered summary that provides a breakdown of complex ESG data that complies with key regulations and supply chain requirements. This data has the potential to improve small businesses’ access to market and provide them with the data they need to become sustainable and impactful.
Helping small businesses address evolving sustainability regulatory and consumer demands is also a key priority for Mastercard Strive in the EU. As part of its recent Innovation Fund, the company sought applicants for innovative solutions to address these issues.
Mastercard Strive is also increasingly focusing on the impact of climate on agriculture and farmers in the U.S. A partnership with California Farmlink is developing a pilot program that integrates capital tools, digital solutions and conservation efforts to better support farmers and encourage social investment in climate-smart agriculture. Additionally, federal funding to combat the climate crisis, such as the $27 billion Greenhouse Gas Reduction Fund, is a priority for Mastercard Strive in the U.S. as the organizations begin deploying funds across the country this summer. Public-private partnerships will play a critical role in ensuring these funds are invested in small businesses and the local communities they support.
A look into the future
As suppliers, consumers and regulators increasingly transition to a green economy, micro and small businesses cannot be left out. With these initiatives, Mastercard Strive aims to contribute to global net zero emissions goals and promote the growth and financial resilience of small businesses worldwide. We are excited to support these innovative partners and work with such inspiring entrepreneurs. We look forward to the insights and experiences our partners share with us as they work to deliver digital and data-driven solutions that support small business growth and environmental sustainability.
Originally published by Mastercard Strive
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About Mastercard
Mastercard is a global technology company in the payments industry. Our mission is to connect and drive an inclusive, digital economy that benefits everyone, everywhere by making transactions safe, simple, smart and accessible. Using secure data and networks, partnerships and passion, our innovations and solutions help individuals, financial institutions, governments and businesses realize their greatest potential. With connections in more than 210 countries and territories, we are building a sustainable world that unlocks priceless opportunities for all.
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