Fintech Feature – Cogo
“Offering a carbon footprint is the start of the journey for me, it helps get the unengaged engaged, and offers them small incremental steps for improvement which will open up more opportunities and impact reductions for the customer based on their lifestyle choices and for our banking clients to create bespoke green financial products” – David Beer, Head of Enterprise Solutions & Partnerships EMEA at Cogo
We spoke to David Beer, Head of Enterprise Solutions & Partnerships EMEA at Cogo to find out more about this exciting fintech that provides carbon footprint management products that enable individuals and businesses to measure, understand and reduce their impact on the climate.
Tell me about Cogo – how was it formed?
The notion of Cogo began when our founder and CEO, Ben, acknowledged that individuals and businesses needed to engage around the climate crisis agenda. Initially called ‘Conscious Consumers’, Ben worked with local businesses to improve their ESG and social impact to enact positive change for their customers. Cut a long story short and Conscious Consumers then rebranded to Cogo and we launched a consumer app. Although the app had good traction, it became clear that we were never going to be able to get the scale needed to create real change by doing this on our own. So the Cogo strategy evolved from targeting individual consumers to reaching consumers through partnerships with banks – as banks have a far greater reach and there was an obvious fit here as your carbon footprint directly relates to your spending.
After this shift in focus, we started gaining real momentum, with our first large partnership launching with NatWest in 2021. This was a game changer for us as we went from speaking to tens of thousands of people via our UK consumer app, to suddenly being able to reach 8 million customers through NatWest. This model is proving particularly successful with 16 banks now working with us globally, and we are in exciting and advanced conversations with many more.
What is your main proposition?
We have two main areas of focus – working with consumers and SMEs. We have two products which we offer – our personal carbon manager and business carbon manager. The carbon manager can be embedded into the mobile banking PFM tools, as seen with NatWest. You make this an easy process and give both SMEs and consumers a footprint within moments of them engaging with the features.
We also have a free to download app in the UK that uses open banking data, through the aggregator Account Score. As a B-Corp organisation, we report our ESG impacts, and our strong internal ethical values makes us ‘ walk the talk when it comes to taking climate action’. We take transaction data (or accountancy data for a business) from the start and use MCC codes to match it to carbon factors. From the back of this data, our behavioural science and carbon data teams work to create personalised suggestions based on the customer’s point of need and where their carbon footprint could be improved. For example, we would give different recommendations to someone who has a car or offer ‘incremental-steps’ ethical nudges to encourage people to explore new lifestyle choices such as eating less meat or energy-saving tips if this consumption is shown in their transactions. We are also aiming to show the cost-savings around any changes, such as the benefits of retrofitting options when switching to more energy efficient appliances.
What can financial services do to help improve an individual’s carbon footprint – how is Cogo playing a role in this?
A lot of people don’t realise that their carbon footprint directly correlates to their spending, so financial institutions can play a significant role in building carbon literacy.
Building carbon data into a customer’s financial journey will engage people in understanding its wider importance for cost savings too.
The next step is to show how banks can finance a customer’s transition to support the efforts they take to mitigate climate change. With the rise of a conscious consumer, individuals need and expect banks to be an actioner, enabler and supporter of change.
What are the benefits of carbon calculation? How do you see people making a lasting change from knowing their carbon footprint?
Carbon footprint calculators can engage the unengaged, and help people take climate action in real-time based on their individual circumstances. It can educate and engage people on their environmental impact, whilst also showing the cost savings of reducing their carbon footprint.
In order for people to adopt lifestyle changes and take action to lower their carbon footprint they really need to see the impact of the changes they are making and alternative choices they could make that fit with their values. This knowledge empowers people to keep going and motivates them to do even more.
What do you think is the main challenge Cogo faces as it takes up open banking?
Open banking has been a real game changer, opening up the potential for collaboration between banks and organisations such as ours. Open banking is a real enabler allowing us to work efficiently, effectively and securely to ultimately benefit the end consumer.
What aggregator do you use to leverage transaction insights and why did you choose them? What would you recommend other fintechs consider when choosing an aggregator?
We use Tink as part of our consumer banking app journey with NatWest to access their transaction data. Account Score is used for our UK consumer marketplace app because they have far greater classification and met the granular requirements that we need now. Consider the data taxonomy provided. Granularity is good!
Are there any other further challenges involved in the consumer adoption of services like Cogo?
The banks we speak to are at slightly different stages in the ESG process. Some are fairly advanced and are prioritising it , whereas others are playing catch up. As with all progress, it is fair to say that some banks are still a little nervous about the prospect of introducing carbon calculators as they are worried that it may switch their customers off. However this isn’t the case, we know from the 16 banks we work with globally what works and what doesn’t. We are experts at driving engagement and effecting real change. We also recently conducted research which shows that customers are more eco-conscious than ever with 75% of respondents keen to know more about the environmental impact of their spending. This also helps the bank meet its ESG goals while prequalifying its customers for green financing options.
How do we go about improving carbon literacy of customers and increasing awareness around the benefits of carbon calculation and data sharing in general?
Carbon literacy is something we are hugely passionate about. For me, providing a carbon footprint is the start of the journey, and then finding ways to highlight the possible cost savings will further emphasise these benefits.
We often talk about measuring a carbon footprint as being similar to losing weight. In order to lose weight, you first need to get on the scales. Carbon footprint management is the same… in order to know and understand your carbon footprint you first have to measure it. From there you can start to understand what it means, and what impact you can have by making adjustments. You need help, support, guidance and encouragement to keep you on track and reinforce your progress.
Where do you see the future heading for Open Banking? What would you want it to look like?
Moving forward, the future is open data and open finance. This allows us to easily combine several different data feeds to give consumers and businesses scope to have even more impact. For example, I would love to see a future where you could utilise GPS/location data to suggest greener routes or alternative transport options. This can be limitless and impacts every decision people make from shopping local and supporting businesses to living a healthier lifestyle.
What is the most exciting ‘next big thing’ at Cogo?
We are all about scale and impact, so the next twelve months for us is really all about working with more banking partners, expanding our existing banking partnerships and moving pilots onto the next stage of full scale solutions for customers. Two years ago we launched our first live banking partner, now we have 16 banking relationships. We hope to maintain this momentum and double the number of banks that we work with in 2023. We are also very excited about the prospect of moving into new markets… we can’t say where yet, but watch this space.