Digital Innovation Digest by Initio, special focus on Corporate Social Responsibility (CSR) and Responsible Finance.

1. DIGITAL INNOVATION DIGEST
RESPONSIBLE FINANCE FOCUS
.
#23 – December 2020

2. 15/12/2020 2
01
02
CREDIT CARD WITH CARBON EMISSION
LIMIT
Digital Innovation Digest #23
4
7
TURNING OFF CERTAIN SPENDING03 11
PRESENTATION OF INITIO &
THE SQUARE GROUP04 13
AFFINITY CREDIT CARDS

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• In October 2020, SQUARE (head office of Initio) published a white paper
dedicated to sustainable finance “The Transition towards sustainable finance:
Te challenges facing banks”.
• To extend the thinking, this Digital Digest will focus on practical examples of
products and services designed by the banking industry to make concrete their
willingness of transformation into a more responsible model.
• The White paper “Sustainable Finance” can be downloaded here:
French version:
• https://cutt.ly/AhkliHm
English version
• shorturl.at/lpNOV
Responsible finance by design
EXECUTIVE SUMMARY

4. 01CREDIT CARD WITH CARBON-
EMISSION SPENDING LIMIT.

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▪ Swedish fintech company Doconomy has launched in association
with MasterCard a credit card (the DO Card) that tracks the
carbon dioxide emissions of purchases, and caps the climate
impact of users' spending.
▪ Transactions (purchases) are analyzed in real time and CO2
calculation is based on the Åland Index
(http://www.balticseaproject.org/en/aland-index), the carbon
footprint is globalized and when limits predefined by the user are
reach, the card may deny additional purchases.
▪ Those who sign up to DO card will receive information about UN-
certified climate compensation projects, and discover investment
funds that have a positive impact on people and the planet.
▪ The card itself is made of bio-sourced material and is printed
with Air Ink – an ink made from recycled air pollution particles.
Credit card with carbon emission limit
EXECUTIVE SUMMARY
How it works
The Aland Index measures the Co2 impact of global
transaction category (groceries, restaurant, fuel etc.) and the
associated carbon compensation required to neutralize the
Co2 footprint.
Carbon footprint is presented along with your monthly Credit
Card bill (or calculated in real time in the case of Docomy
app) and local, global or lifestyle call to actions are suggested
to compensate for the impact.

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Credit card with carbon emission limit
ANALYSIS
After Credit Cards linked with Air Miles rewards or automatic
CashBack, here are cards backed by eco-responsible
behavior.
The DO (Doconomy) initiative is fashionable at the moment
and may be of interest for companies (and consumers)
willing to improved their CSR and green attitude.
The DO card is pushing things a little further by adding
“awareness” function.
It might be objected that the Co2 consumption is
calculated too grossly and based only on € expenditures
instead of taking in count the real type of goods purchased.
By example 49,02 grams of Co2 are automatically counted
per euro spend in the category “Grocery Store and
Supermarket”, regardless the type of goods purchased or the
type of supermarket visited (meat or organic vegetables,
local market or national distributor etc.)
But like we say in French “C’est l’intention qui compte”
ANALYSIS TRUE CSR OR WINDOW DRESSING ?
• Announced in October 2019, the DO card is still a concept
and is not yet available for daily use.
• The DO card merely attracts the user's attention, it does
not prevent the act of purchase and does not offer
automatic compensation for the carbon footprint.
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7. 02AFFINITY CREDIT CARD

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▪ A direct-donation or affinity credit card is the set-it-and-forget-it
method of donating with a credit card, as they automatically
donate a portion of your purchases to your designated
organization, with no work needed on your part.
• Although affinity cards may seem like a collective win for the
bank, organization, and cardholder, there are negatives as well.
Affinity cards offer fewer of the perks (such as warranty coverage)
other cards do; they sometimes charge higher fees, and the
amount donated to the charity is very small—often about .05%.
Nevertheless, affinity cards are popular with consumers who like
the idea of giving as they spend
• Affinity cards are not the only way to automatically drive a portion
of spending to saving account or another beneficiary : Tens of
PFM, e-Wallet or Neobanks (Yeeld, Sqirl, Revolut…) and even
classical banks like LCL or MonaBanq are proposing micro-saving
by rounding automatically all expenses. Then those savings can
be routed to charity funds or to personal saving account that can
be used by example to automatically reload the payment account
in order to prevent unauthorized negative balance and linked
agios.
Affinity credit cards
EXECUTIVE SUMMARY
The Charity Charge World
Mastercard allow you to
donate up to 1% of your
purchases to charity fund
of your choice.
With the BofA World
Wildlife Fund Visa The
WWF will receives 0.08%
of all net purchases.

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Affinity credit cards
ANALYSIS
The partnering (non profit) organization usually gets a one-
time, flat-rate donation whenever a new credit card
account is opened, and it may also earn a percentage of
purchases made by the new account holder. Although such
donations are relatively small, the partnering organization
may also benefit from increased visibility and awareness for
its causes.
The beneficiary organization might specify how it intends to
use the donations that are collected from each purchase. A
nature-oriented organization, for example, may pledge to
plant a new tree each year the card remains active.
Sadly we must observes that charity programs are usually
far less competitive than classical rewards program. While
Fuel produced branded credit card can offer you up to 3% of
cashback, non-profit affinity cards are offering maximum 1%
of expenses as donation.
Though the benefits offered through affinity cards might not
be equal to other programs, for some cardholders, the
opportunity to personalize a credit card with a logo from a
cause or group they support is an incentive in and of itself.
ANALYSIS One step beyond:
For the majority of cardholders, credit card rewards are the
best feature offered by their cards. At the same time,
however, nearly a third of cardholders fail to redeem those
rewards — leaving millions of euros in the pockets of card
issuers.
Instead of letting those rewards lie fallow, it’s possible to use
them to make a difference for your favorite cause. Several of
the top credit card issuers allow now you to redeem your
cash back or points as a charitable donation as long as you
do not forget to activate this option when registering the
card.
TRUE CSR OR WINDOW DRESSING ?
2

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▪ A small survey on top banks websites in Belgium, France and Luxembourg is giving you a
clear evidence: there is (almost) no charitable affinity credit cards. If it is easy to find
credit cards with rewards program sponsored by Airlines companies, you will struggle to
find affinity card with non profit partnership.
▪ While several French banks such as BRED, BPE, BNP, etc. offer a "solidarity option" for
their credit cards, in most cases the donation is borne directly by the client as an
additional cost over the initial purchase or as mandatory "personalization fee”.
▪ A notable exception: the Goodpay card, proposed by the brand new Belgian
cooperative bank NewBE. For every purchase with the card, 5 cents are given to an NGO
selected by the customer, at no extra cost for him. Just for the record, the card is also
described as organic degradable.
Affinity credit cards
WHAT ABOUT EUROPE ?
A notable exception: the Goodpay card,
proposed by the brand new Belgian
cooperative bank NewBE.
▪ In December 2020, the Neobank N26 announced that for every purchase made in
December with the N26-Mastercard, the equivalent of one meal’s price (0,20 €) will be
donated to the World Food Program – at no cost for the user.
▪ This is a unique case in the neobanking world, usually very price-sensitive where the
optimization of operational costs is not fitting very well with the sharing of payment
revenue induced by co branded / affinity cards schema.

11. 03“TURNING OFF’ CERTAIN SPENDING

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▪ In December 2018, Barclays becomes first UK high street bank to enable
customers to stop transactions at chosen retailers to give vulnerable customers
greater control over their money.
▪ A simple button within the Barclays mobile banking app now allows the
customer to choose which types of retailers they are able to spend with,
meaning any attempted payments that fall within the ‘turned off’ category will
be automatically declined.
▪ If it is very easy to “turn off” certain spending, it is also easy to turn them “on”
again. But according to the Money and Mental Health Policy Institute any
sticking point in the buying process may be helpful for person who are trying to
resist to purchase (or gambling) addiction.
Turning off certain spending
EXECUTIVE SUMMARY
If Barclays on the first high street bank to propose such
feature, Neo Banks like Monzo and Starling are doing it
since several years now.

13. 04INITIO &
THE SQUARE GROUP

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• 700 consultants, 95% employees
• 52 % men / 48% women
• Turnover 2019: 120m €
• 2.5% of turnover invested in training
• 1% of turnover invested in R&D
• Large team in Finance, Risk, Regulatory & Compliance
• Business/Process analysts & Project managers with Digital
experience
KEY INFORMATION
Initio in a nutshell
Initio is the international brand of the Square group, a business consulting firm in strategy, organizational and
operational consulting.

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Initio in a nutshell
Initio is organized in 4 business practices and 8 areas of excellence

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Areas of excellence
Businesses need to think ahead, to make decisions that will take them to the top.
Initio guides its clients by making its expertise available to them in 9 key areas.
.
INNOVATION
Square supports its clients in the transformation
of their innovation dynamics. Our consultants,
with their tailor-made approach, help to design,
industrialize and govern innovation to ensure the
sustainable growth of companies and their
transformation into socially and environmentally
responsible entities.
PEOPLE & CHANGE
Square helps its clients to acquire, integrate and
develop their organisation’s human capital. In
order to create greater commitment within teams,
our interventions focus primarily on adapting work
methods to operational and cultural changes, the
effectiveness of human resources departments
and skills development.
MARKETING
Square supports its clients across the entire
marketing spectrum: strategic marketing,
relationship marketing, product marketing,
communication, pricing, customer satisfaction.
Our expertise, initially focused on the banking and
insurance sectors, is now aimed at all B2C
industries or services.
SUPPLY-CHAIN
Square ensures the operational excellence of
logistics, from procurement to the last mile, with
differentiating customer journeys. Our experts
design omnichannel solutions that implement best
practices in information systems, mechanization
and robotization.
DATA
Square develops Data strategies and ensures their
operational implementation by taking the lead in
Data Management, Data Analysis and Data
Science projects. Our expert and pragmatic
approach aims to enhance and secure companies’
data assets.
REGULATORY & COMPLIANCE
Square advises its clients in the rollout of new
regulations, as well as in the optimization and
enhancement of control systems. This area of
excellence is supported by a community of
experts of 130 consultants who, in addition to
client assignments, conduct major research and
publication work.
RISK & FINANCE
Square leads the management of financial and
non-financial risk control programs, as well as the
transformation of the Risk and Finance functions
in response to changes in prudential regulations
and issues related to data control.
DIGITAL
Square assists its clients in the development of
their digital strategy, the design and
implementation of new digital journeys for their
clients or their employees, as well as in all internal
transformation projects and support for new
design methods.
CSR & SUSTAINABLE FINANCE
Initio supports its clients in their transformation
towards a more responsible model. This support
covers the strategic definition of the CSR
ambition, the transformation of business models,
and compliance work both in terms of their
regulatory aspects and their Data Management
and Data Science aspects. Initio also assists its
clients in their human and cultural support for
their CSR policy.

17. Initio
@initio_eu
17, Boulevard General Wahis
1030 Schaarbeek
Belgium
+32 (0)2 669 77 44
Initio.eu
blog.square-management.com