| 4. In which ways is the initiative creative and innovative?
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It provides financial incentives for green consumption and lifestyle. It encourages sustainable eco-friendly consumption and lifestyles by giving back a portion of credit card commissions to customers as Eco-Money points when they purchase eco-friendly products. A portion of the increasing profits of credit card companies and manufacturers is donated to the Green Credit Card Initiative, which enables continuous operation of the initiative without additional government support.
It contributes to sustainable development via public/private partnership. It is a sustainable business model that promotes green consumption and lifestyle by engaging various stake holders including the central and local governments, public organizations, consumers, distributors, manufacturers, banks and credit card companies. The core element of the public/private partnership is that the government promotion of eco-friendly lifestyles helps private companies that participate in the Green Credit Card Initiative (manufacturers, distributors and financial institutions).
It measure eco-friendly consumption and provide incentives with single credit card. A wide range of eco-friendly consumption and lifestyles such as purchasing eco-friendly products, using public transportation, and saving energy at home can be measured and given financial incentives accordingly by a single Green Credit Card.
It communicates with customers via mobile application. People can check the Eco-Money points they earn in real time and find information on eco-friendly products, distributors and events via a mobile application.
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| 5. Who implemented the initiative and what is the size of the population affected by this initiative?
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The initiative is operated by Korea Environmental Industry and Technology Institute (public organization), BC Card and KB Card (private enterprises), led by the Ministry of Environment (central government) engaging 19 financial institutions (card issuers), 1,957 eco-friendly products of 224 manufacturers, 40,464 retail outlets and 17 local governments.
All Korean people (about 51.7 million) can join the initiative. As of December 2016, the number of Green Credit Cards issued was 15.08 million, which accounts for about 56% of the nation's economically active population (27.33 million).
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| 6. How was the strategy implemented and what resources were mobilized?
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There was a need to discuss how to provide measures that enable ordinary people to participate in sustainable consumption in their daily life. Accordingly, from April to December 2010, the government-led 'Green Consumption Forum' was held to gather opinions from private enterprises and citizens on sustainable consumption and lifestyle.
In December 2010, a framework of “Green Credit Card Initiative“ was developed based on opinions collected through the forum. Green Credit Card refers to a credit or debit card to promote the sustainable consumption and lifestyle of ordinary people by providing financial incentives for purchasing eco-friendly products, using public transportation or saving energy through a credit card point platform.
In the first half of 2011, there was an open recruitment of Green Credit Card Initiative operators and an agreement was concluded with participating companies. In July 2011, the issuance of Green Credit Cards began for all citizens. In July 2013, the Green Credit Card was officially certified by Korea Record Institute as the credit card with the highest number of issuances in the shortest period, which proved that the program successfully reached people.
As of December 2016, 2 credit card companies, 20 financial companies, 1,957 products from 224 companies, and 40,464 retail stores are engaging in the green card system through continuous cooperation with financial institutions and private enterprises.
In 2012, the “Green Credit Card Steering Committee” was established with representatives from the government, private sector, academic and civil societies. Since then, it has been monitoring and evaluating the program to ensure its operation is transparent and fair.
In 2011 when the Green Credit Card Initiative was first introduced, a total of $570,000 in finance was procured including $350,000 from the government, $200,000 from KEITI, and $20,000 from private donations. The Green Credit Card Initiative minimized the initial cost of the system by utilizing existing payment systems. It also secured continuous financial resources via contributions from the commissions of Green Credit Card operators. As of 2016, the program’s annual budget was approximately $3.3 million. $2.9 million of this came from private donations contributed from Green Credit Card payment commissions, while $0.4 million was from the government budget.
The program’s key technologies are the Green-POS system and green consumption analysis system (Green-CRM). The Green-POS system integrates the information on eco-friendly products participating in this initiative into credit card payment systems at retail stores. It enables people to get financial incentives when they purchase eco-friendly products using Green Credit Cards and to check them through receipts. Green-CRM is a system for external customer relationship management by analyzing overall eco-friendly consumption patterns including energy savings from the use of Green Credit Card and changes in sales of Eco-labeled products. Big data collected through this system is used for service improvements such as associations with relevant organizations or promotion planning.
As of 2016, a total of 14 people were deployed for the program including 2 from MOE, 4 from KEITI, and 8 from program operators (credit card companies). They are responsible for building operating systems, managing financial incentives, recruiting participating companies, and undertaking work related to Green Credit Card Steering Committee, education and promotion.
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| 7. Who were the stakeholders involved in the design of the initiative and in its implementation?
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At the planning stage, MOE and KEITI led design and implementation planning for the program.
There are a wide range of stakeholders participating in this program including central government (MOE), public organizations (KEITI), operators (2 credit card companies), financial institutions (19), manufacturers (224), distributors (40,464) and local governments (17). In addition, the 'Green Credit Card Steering Committee' composed of government, public organizations, credit card companies, academics, private enterprises and civil society groups is monitoring and evaluating the Green Credit Card Initiative.
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| 8. What were the most successful outputs and why was the initiative effective?
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- [SDGs 12.] It provided more opportunities for ordinary citizens to engage in eco-friendly consumption and lifestyles by expanding eco-friendly products and Green-POS systems. Over the past year, the choice of eco-friendly products by Green Credit Card users increased by 50% to 1.93 million purchases in 2016. In addition, the number of manufacturers participating in this initiative has increased five times over the last four years (224 in 2016) and the number of participating retail stores has increased 54 times (40,464 in 2016).
- [SDGs 12.] As a result of providing financial incentives in return for use of public transportation to promote a modal shift to sustainable transportation, the amount of Green Credit Card payments for public transportation surged 57 times from $2.5 million in 2011 to $142.7 million in 2016. And the annual average payment for public transportation per card also increased 2.2 times over the same period.
- [SDGs 12.] According to a survey on Green Credit Card users, the number of people with higher interest in eco-friendly products grew from 80.8% to 88.6% between 2011 and 2016, and the number of people with preference to eco-friendly products increased from 65.4% to 68.2%. This shows that the Green Credit Card Initiative raised public awareness regarding sustainable development and living and induced behavior changes.
- [SDGs 13.] The initiative also contributed to non-industrial GHGs emission reduction by promoting sustainable consumption and production such as Eco-labeled products purchases and public transport use by Green Credit Card and energy saving at home. The non-industrial GHGs emission reductions achieved by this initiative amount to 2.39 million tons as of 2016. This was calculated based on a comparison of eco-friendly product purchases, use of public transportation and energy savings between general credit card users and Green Credit Card users.
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| 9. What were the main obstacles encountered and how were they overcome?
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The main obstacles to introducing and operating the Green Credit Card Initiative were as follows.
First, roles and responsibilities among ministries and government agencies needed to be coordinated in order to engage existing policies for green consumption and lifestyle established and implemented by other organizations.
Second, encouraging various private entities to participate in the initiative and securing financial contributions to guarantee financial incentives for eco-friendly consumption and lifestyles.
Efforts to attract non-industrial GHGs emission reduction were made from a high level organization, the Committee on Green Growth, which plans the basic direction and strategies for green growth policies. Thanks to the high level organizations’ support for cooperation among ministries and government agencies by taking the program as a major policy, this obstacle could be overcome. As an incentive for participating manufacturers, contributions to this initiative were recognized as donations, which resulted in corporate tax cuts, and Green-CRM data was given.
The initial investment cost for establishing the Green-POS system was regarded as the biggest obstacle, however the Green Credit Card Initiative operators (credit card companies) paid for it, making it easier for distributors to join this program. The Green Credit Card operator could get more profits from commissions, if consumers use their Green Credit Card(instead of other credit card) to purchase eco-friendly products or use public transport.
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