By Alicia Gill, Head of Marketing, Gratifii
There’s an untapped opportunity in the loyalty rewards market that could provide an edge when it comes to your rewards program, particularly with highly loyal values-based members.
Sustainability, much like loyalty programs, is an increasing focus for businesses everywhere. But it’s not just something your business is interested in, with eco-awareness the new normal for younger consumers and a growing tide of ‘conscious consumers’.
The 2020 Mando-Connect and YouGov White Paper, What the British want from Loyalty, showed 28% of Brits wanted rewards to help the environment and charity. In 2022, the third version of the report found 71% of British adults thought loyalty programs should help people live sustainability or support the environment and 28% felt programs should offset carbon.
A recent US consumer trends report by Attest shows a 79.3% of consumers surveyed want brands to take a stand and represent a cause, with climate change one of the top issues cited by consumers.
And a recent CHOICE survey shows Australians too want to use their purchasing power for good, with 65 percent of consumers surveyed considering the carbon footprint of their purchases.
It’s a similar story for employees.
A 2020 Unily report found that almost two-thirds of UK survey respondents were more likely to work for a company with strong environmental policies, while research from Elmo found 48% of Australians – including 71% of Gen Z and 52% of Millennials – would not work for a business that did not take action to address climate change.
At the same time, social offerings, including programs which connect people with causes, and the ability to donate rewards to charity, have been identified in The Point of Loyalty’s For Love or Money 2022 report as one of the six currencies loyalty program members care about, alongside the likes of financial rewards, experiential offerings and programs that make their users feel special.
This burgeoning interest led The Loyalty Academy to develop the first ever course on the subject last November – Introduction to Sustainability and Loyalty – outlining specific considerations and use cases.
It's clear climate change is now a driver for customer loyalty.
Customers are seeking new, innovative ways to help them make a positive impact on sustainability. As a loyalty manager, that paves the way for you to reward members or employees with a new offer – one that gives them the satisfaction of doing good, while also enabling you to highlight your business’ commitment to tackling the tough climate issues.
And that new form of loyalty program rewards? Carbon offset gift cards.
A carbon offset 101
The term ‘carbon footprint’ was popularised by an early 2000s TV advertising campaign by oil and gas provider BP, urging us all to do our bit in lowering our own carbon footprints – the amount of carbon dioxide emitted through your daily activities, from driving to work to electrical use and even the foods you eat.
Our World in Data puts the average footprint per person in the United States at 14.85 tonnes in 2021. Australians were racking up even more at 15.09 tonnes, with Canada sitting at 14.30 tonnes. The United Kingdom comes in nearly 10 tonnes lighter at 5.15 tonnes.
On the flip side are carbon offsets, which are essentially a unit of reduction in greenhouse gas emissions, or an increase in carbon storage through things like land restoration or the planting of trees.
Carbon offsets work by investing funds in projects that ‘capture’ carbon, or are energy efficient, preventing the release of greenhouse gases.
One carbon offset, or carbon credit, represents one metric ton of carbon dioxide or its equivalent greenhouse gas (CO2e) that is removed.
While planting trees that sequester carbon is one of the most common forms of carbon offsets, projects run the gamut from building clean efficient cookstoves and methane gas capture in landfill, to protecting rainforests through diversifying landholder incomes and supporting sustainable agroforestry.
Done right, the programs don’t just neutralise greenhouse gases: They can deliver life-changing social and economic benefits to communities.
Take the example of wind and solar farms replacing coal-fired power stations in Tamil Nadu in Southern India. While the project provides clean energy, it has also created employment opportunities in an area where climate change has made agriculture increasingly difficult. Locals are employed as engineers, maintenance technicians, on-site operators and security guards, boosting the local economy. New roads, built for the construction of the wind and solar farms are providing improved accessibility, while energy security is improved and rural electrification has been extended. The wind and solar farms have also funded local schools, vaccination programs and water wells to irrigate crops and bring life back to the parched land – powering real change not just for the environment, but the community too.
So why should you consider linking carbon offsets to your loyalty program?
Carbon offsets have traditionally been used by organisations needing to meet compliance obligations or balance the scales for unavoidable emissions on the path to reduction (and let’s be clear here, offsets are not the end goal – they need to be used in conjunction with actual carbon reductions by everyone).
But increasingly, individuals are also using them to offset their impact on the environment, including for specific instances, such as a flight.
Airlines have been allowing consumers to purchase carbon offsets when booking flights for a number of years, with hotels and car manufacturers also embracing the concept.
Sustainabilty isn’t a new concept for loyalty programs, with green loyalty programs a growing market, and some programs allowing loyalty point to unlock credits.
But now there’s another option with Gratifii enabling businesses to offer Carbon Offset Gift Cards to reward and engage members or employees.
Gratifii has partnered with Asia Pacific’s most trusted carbon offset company, Tasman Environmental Markets (TEM) and highly respected climate change advisory firm nDevr Environmental, to support verified carbon offset projects supporting native forest regeneration in Australia and renewable energy projects in Asia, including the previously mentioned Southern India project, via gift cards.
True, not all of your members will be interested yet in taking up carbon offset gift cards as part of your loyalty program. But the growing swathe of values-based members – those willing to vote with their wallets to support brands that align with their values – are likely to welcome the opportunity.
Those members come with some added benefits for your business, as highlighted by Forrester research that shows values-based customer are more loyal – they spend more and feel more positively about those brands.
Gratifii, which has two CLMPsTM on staff, is delighted to be a key sponsor of the inaugural Australian Loyalty Academy CLMPTM Certification Workshop being held this May in Melbourne. We believe supporting loyalty education to help raise standards in the industry benefits all within the industry – just as carbon offsetting holds the potential to benefit businesses and all of humanity.
Alicia Gill is the Head of Marketing for Gratifii, an Australian-based loyalty services and technology provider with clients in multiple markets around the world.