How the Sustainable Consumption Index shows we can make a difference

Whether we’re booking flights or recycling our waste, most of us are broadly aware of the climate impact of our lifestyles. We know that a long-haul overseas trip has a serious impact on our carbon footprint. And we hope that diligently separating different kinds of plastic before recycling them will make some difference to the health of the planet.

It can be hard to truly measure what effect our actions have on the environment. Throughout our everyday lives, nearly everything we do has some kind of consequence on the climate, from turning on the shower to traveling to work to buying a cup of coffee.

Ultimately, two thirds of global greenhouse gas emissions are generated from our lifestyle choices. While consumers might be tempted to wait for industry and regulators to solve the environmental impact of corporate supply chains, these emissions are intimately connected to consumer demand. If society is going reach our global decarbonization targets, then change needs to include individual actions.

And making lifestyle changes can make a difference in cutting carbon emissions, according to the Intergovernmental Panel on Climate Change, a body of international scientists assembled by the U.N. In a 2022 report, it points to sociocultural and personal consumption changes as key drivers for climate impact mitigation, helping to push back against the rise in global temperatures and meet international commitments to the Paris Agreement. Making it easier for people to use cleaner forms of transport or eat more plant-based foods, for instance, could cut global greenhouse gas emissions by 40% to 70% by 2050.

But where do we start making the necessary changes that our planet so desperately needs? One tool that can help map potential impactful changes is the Sustainable Consumption Index, which has been developed by Mastercard and Doconomy, a leading impact fintech company providing banks with innovative tools to drive climate action and financial wellbeing. The index uses data-driven insights to help individuals and decision-makers in business and government assess and implement carbon emissions reduction efforts.

By combining Mastercard’s spend data with Doconomy’s Åland Index of estimated CO2 impacts of transactions, it has created a quantitative measure of Sweden’s aggregate consumer carbon footprint — showing, for example, that emissions resulting from spend on air travel and fuel are not declining as fast as those on retail spend.

The index then uses interactive simulations to model population-wide shifts to low-carbon consumption — what the impact of buying more secondhand goods or eating less meat would be — and comparing it with current emission levels. Decision-makers could use the Sustainable Consumption Index’s models to access a more holistic view of the emissions impact of consumers’ purchasing decisions, enabling them to maximize impact when designing products and policies that support and incentivize shifts towards more sustainable choices.

The Sustainable Consumption Index was designed with the understanding that for any real change to gain traction, it needs to overcome three key challenges among consumers.

The first is a lack of inspiration. With the existential threat of climate change, it is easy to succumb to a sense of fatalism. Our changing climate is already causing famine, floods and fires, with millions of people affected each year, often those in the most vulnerable communities. But while sympathizing with and aiding those already affected, we cannot allow ourselves to think this is the only possible outcome. Instead of doom and gloom, a sense of hope and optimism can reinforce the message that the decisions consumers make do make a difference, and that our future is not already decided.

The second is a lack of information. Consumers need to know which decisions they make will have the most significant impact. Climate literacy has to be expanded, so that we’re all more aware of the impact of our choices, and we’re better informed to make more sustainable decisions. Policymakers can also benefit from having this literacy front and center.

The index is a starting point for providing this type of information, tracking consumption against carbon commitments, making the results of our individual choices more transparent and driving support for more effective policies. While there is a huge amount of power in collecting and analyzing data, ultimately, we are currently working in hindsight, looking at what has happened in order to inform our decisions going forward. To take the next step, we will need to improve the delivery of this information, anticipating, looking ahead and reaching people before they book their cabs or buy their T-shirts. In the future, this type of data will need to become more granular and more widely available to drive impact in everyday purchasing.

The third challenge is the lack of options. It’s all well and good to inspire people to make positive changes and give them the information to know which change makes the biggest difference. But if there’s no way to actually make those changes. then our efforts around education can result in further pessimism. With the technology and data we have at hand, for example, we can make low-carbon options from travel to retail more accessible, intuitive and frictionless. The more we can show and proactively offer alternatives, the easier it becomes to make that choice.

When we can inspire, inform, and enable consumers before they make decisions, we’ll truly begin to make the changes our planet so desperately needs.

Malin Berge is the senior vice president for Mastercard's Sustainability Innovation Lab. Mathias Wikström is the CEO and co-founder of Doconomy.