Visa Zeroes in on Scope 3 Emissions
David Hochstim, CFA Senior Analyst – Financials
Visa is a payments technology company that enables consumers, financial institutions, businesses and governments to send and receive payments securely and reliably to nearly any place globally.
Our engagements with the company over many years have focused on Visa’s goal of expanding access to financial services to the unbanked and underbanked (396 million people toward the goal of 500 million) and helping empower micro and small businesses as well as helping to promote financial literacy. Plastic waste has been a theme for ClearBridge engagements in recent years, and we have also engaged Visa on its efforts to reduce its environmental impact, including through its plastic cards. During a December 2021 engagement led by David Hochstim and attended by several ClearBridge portfolio managers and members of Visa’s management team, including executives responsible for investor relations, compensation and benefits, corporate responsibility and sustainability, and governance, we were encouraged to learn of the company’s latest positive steps in this regard. These include measuring the carbon footprint of consumers’ individual transactions that use Visa cards. Visa now offers an Eco Benefits bundle to issuers that can be offered to customers interested in sustainability (62% of all consumers and 80% of millennials said they are somewhat or very likely to apply for a card with environmental benefits). Visa has also been working to reduce water use in its data centers and increasingly relying on renewable energy for power. Some of Visa’s data centers have very large roof surfaces which could be used to generate solar energy, but those could only meet ~8% of company needs. Visa is targeting net-zero by 2040, including Scope 3 emissions. To address the environmental impact of plastic debit and credit cards, Visa has been working with card manufacturers to facilitate the development of cards made from recycled plastic. Visa is also working with companies that have expertise recycling hardto-recycle plastics and is working to make card-issuing banks aware of these options. The shift to digital accounts (without a plastic card) is the most beneficial environmentally. So far, card manufacturers have been able to produce cards made with 90% recycled plastic.
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