Toward a Green Economy: Enabling Small Businesses To Become More Sustainable and Resilient Through Digital Solutions and Mastercard Strive
Originally published by Mastercard Strive
There’s an important environmental shift underway, and small businesses are playing a central role. Across the globe, an overwhelming 94% of consumers are demanding a shift to a green economy and holding businesses accountable for driving the crucial changes needed to achieve global net-zero emissions. As the backbones of most economies, small businesses are key drivers of environmental sustainability and need support to address mounting consumer demands for sustainable goods and services.
Recognizing the critical role of small businesses in achieving net-zero emissions, Mastercard Strive has partnered with organizations worldwide to support innovative technologies that enable small businesses to contribute to positive environmental impact. Partners are testing new ideas and scaling socially inclusive innovations for small businesses that minimize the impact on the planet and support communities that are already — or will become — impacted by climate change.
In this post, we share more details about these initiatives, their achievements, and lessons learned so far, where applicable. On the whole, Mastercard Strive programs are supporting small businesses to 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 eliminating single-use plastic packaging
The United Nations Environmental Programme estimates that about 85% of all single-use packaging becomes waste, ending up in landfills or as unregulated litter. In emerging markets such as Kenya, most small businesses are informal and tend to sell household products in small packaging quantities (as little as 50 grams) to account for the financial realities of low-income consumers. However, this model ends up hurting consumers and the environment alike: more frequent purchases of small quantities means consumers pay more over time, while also generating large amounts of single-use plastic waste.
In 2022, Mastercard Strive partnered with Novek to develop and test an Internet of Things–enabled dispensing system for washing powder for micro-retailers in Kenya. Mastercard Strive and Novek believe there is an opportunity for this technology to eliminate single-use plastic packaging and grow micro-retailer revenue at the same time. During the program, Novek built and successfully tested dispensing prototypes, learning several lessons on building innovative technology for small retailers. They learned that regular touch points involving training can promote consistent use among retailers and that it takes time to build trust among customers to switch to accessing a product in a new way. Novek is now building a more stable machine that requires less maintenance and focusing on building partnerships that can support their growth.
More recently, in Indonesia, Mastercard Strive has partnered with Alner, which employs a reusable and returnable packaging system to replace single-use, non-recyclable packaging for daily essentials such as detergent, rice, cooking oil, and more. Consumers can use the packaging up to 20 times. Alner creates a sustainable consumption loop by first providing Fast-Moving Consumer Goods (FMCGs) companies with reusable packaging and then incentivizing consumers to return the packaging through a deposit-reward scheme. Through a mobile app, small businesses can monitor their business performance and environmental impact by tracking the volume of returned single-use plastic. Mastercard Strive is enabling Alner to further enhance its mobile app by introducing features to boost small businesses’ performance. These enhancements include comprehensive training materials, peer-to-peer learning, gamification elements, digital payments, and timely market insights.
Participating in the circular economy
Thousands of tons of unnecessary waste are created each year. The circular economy can minimize waste by keeping products, materials, and resources in use for as long as possible, reducing the 80% of products that are currently going to landfill or being incinerated.
In the UK, Mastercard Strive has partnered with Tern Eco, a retail tech solution that leverages circular retail models, such as reuse and resale, to support small businesses on their journey to circularity. Tern Eco’s enhanced solution will enable smaller time-poor retailers to intuitively set up circular retail programs, offering greater flexibility and new functionality to enable repairs, upcycling, and relisting products traded-in for resale.
Additionally, using the data generated and aggregated across merchants, consumers, and product verticals, Tern Eco will build a comprehensive view of the full life cycle of products to identify emerging market and consumer trends — data that will be shared with the wider retail community to encourage circular models in other markets.
Assessing business impact on social and environmental issues
Today, countries require major buying organizations to mandate their small business suppliers to measure and disclose their impact on social and environmental issues, 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 cater to small businesses’ unique needs. To address this, Mastercard Strive has partnered with Vested Impact, an impact assessment platform, to provide micro- and small businesses across the globe with independent, affordable, and data-driven impact assessments.
Through Vested Impact’s platform, small businesses can leverage more than 300 million science-based research papers and impact data points to assess the impact of their products and services on global priorities like climate, education, healthcare, and the economy. Small businesses will gain access to an AI-powered comprehensive summary, offering a breakdown of complex ESG data that aligns with leading regulations and supply chain requirements. This data has the potential to improve small businesses’ market access and empower them with the data they need to become sustainable and impactful.
Supporting small businesses to navigate evolving regulatory and consumer demands around sustainability is also an important priority for Mastercard Strive in the EU, which sought applications for innovative solutions to address these issues in its recent innovation fund.
Mastercard Strive is also increasingly turning its attention to the impact of climate on agriculture and farmers in the United States. A partnership with California Farmlink will pilot a program that integrates capital tools, digital solutions, and conservation measures to better support farmers and promote social impact investment in climate-smart agriculture. Further, federal funding focused on the climate crisis, such as the $27-billion Greenhouse Gas Reduction Fund, is also top of mind for Mastercard Strive in the US as organizations begin deploying funding across the country this summer. Public-private partnerships will play a critical role in ensuring this funding is invested in small businesses and the local communities they support.
Looking ahead
As suppliers, consumers, and regulators increasingly shift toward a green economy, micro- and small businesses cannot be left behind. Through these initiatives, Mastercard Strive aims to contribute to global net-zero gas emissions goals and promote the growth and financial resilience of small businesses worldwide. We are delighted to support these innovative partners and work alongside such inspiring entrepreneurs. We look forward to the insights and lessons our partners will share as they work to deliver digital and data-first solutions that support small business growth and environmental sustainability.
