Questions/Answers

The Green Credit Card is an initiative led by the Korean Ministry of Environment and Korea Environmental Industry and Technology Institute in partnership with the private sector to promote sustainable consumption and lifestyle patterns of individuals. Green Credit Card users are rewarded points when they buy eco-labeled products, use public transportation, make paperless transactions, and consume less electricity, water, and gas at home. The Green Credit Card also offers discounts for electric car charging services and the purchase of recycled automobile parts. The economic rewards are converted into cash points called eco-money points and accumulated in the credit card system, later to be redeemable for cash or used for various purposes. The initiative has been effective in closing the information gap and tackling price barriers that eco-friendly consumption has faced. The price competitiveness of eco-friendly products increases as a result of the economic incentives that can save a consumer up to 24 percent of product prices. Green Credit Card purchases of eco-friendly products increased 1.3 times last year, showing an increasing consumer preference towards eco-friendly products. As of December 2017, there were about 2,000 eco-labeled products sold at more than 40,000 retail stores that are affiliated with the initiative. Transportation fees paid using the Green Credit Card have risen by 73 times to 182.9 million USD in 2017 compared to 2011. It is estimated that about 3.4 million tons of CO2 equivalent emissions reductions were made by Green Credit Card users between July 2011 and December 2017.

Since the 1970s, the rapid economic growth of the Republic of Korea, coupled with industrialization and urbanization, has resulted in resource intensive production and consumption patterns. In order to transform society to be more sustainable in consumption and production, the government introduced a mandatory green public procurement policy in 2005. Based on its successful outcomes, diverse approaches such as product sustainability information and public outreach were taken to promote sustainable individual consumption patterns. However, these efforts have not been effective at inducing voluntary citizen participation. Hence, an innovative measure needs to be explored to promote voluntary citizen participation to reduce GHG emission and environmental pollutions. The Green Credit Card is a public–private partnership that rewards eco-friendly lifestyles on a credit card platform. Users gain economic rewards by i) purchasing eco-friendly products and making paperless transactions, ii) using public transportation and electric car charging service; and iii) reducing utility usage including electricity, water, and gas. In cooperation with 4 ministries, 20 financial institutions, and 19 retailers, Korea Environmental Industry and Technology Institute (KEITI) offers reward points through one single credit card platform to improve effectiveness and convenience of the system. In just about six-and-a-half years more than 16.4 million cards have been issued, which is equivalent to 59.9 percent of the economically active population of Korea.

The Green Credit Card is an open platform that provides incentives for diverse eco-friendly consumption and lifestyle choices. The initiative was initially designed by the Green Consumption Forum, which has representatives from academia, consumer groups, and the distribution industry. At the beginning, the incentives were only provided for purchasing eco-friendly products, using public transportation, and saving energy at home. The steering committee serves to channel the demands and views of diverse groups of populations, thereby promoting participatory decision making. In responding to feedbacks from the committee, eco-friendly agricultural products and recycled automobile parts have been newly covered by the Green Credit Card. In addition to Green Credit Cards, Green Debit and Membership Cards are simultaneously issued to allow the youth, elderly, and retired and unemployed to have equal access to the benefits of the Green Credit Card. Furthermore, special editions of the Green Credit Card are issued to people with a greater need, such as expecting moms and housewives raising preschool children who use voucher-type cards provided by the government.

The Green Credit Card promotes the reduction of GHG emission by individuals to address SDG Goal 13. It tracks and rewards actions to reduce GHG emission by the card users such as purchasing eco-friendly products, using public transportation, and reducing energy use in the residential sector. Transportation and residential sector are known to be the largest contributors of GHG emission in the non-industrial sector. It is estimated that about 3.4 million tons of CO2 equivalent emissions were reduced by the Green Credit Card users between July 2011 and December 2017. Additionally, the Green Credit Card contributes to delivering SDG Goal 12. Through the mobile application and website of the initiative, people can make more informed purchasing decisions from the information provided on eco-friendly products and retailers. The price competitiveness of eco-friendly products increases as a result of the economic incentives that can save a consumer up to 24 percent of product prices. The purchase of eco-friendly products by the Green Credit Card increased 1.3 times last year, showing increasing consumer preference towards eco-friendly products. As of December 2017, there were about 2,000 eco-labeled products sold at more than 40,000 retail stores that are affiliated with the initiative.

The initiative provides a financially sustainable solution. It is not feasible for the government to be the sole funder for incentives, due to the eventual fiscal burden from increased participation. On the other hand, the financial resources required to provide economic incentives called “eco-money points” of the Green Credit Card are mainly funded by the private sector that benefits from peoples’ participation in the service. Moreover, the initiative is user-friendly and easily accessible. According to the Bank of Korea, 71 percent of payments in Korea made domestically are processed by credit cards. Linking an eco-friendly reward system with a credit card platform has proven to be effective in engaging a great number of people. In order to provide universal and equal access for all, a membership card is available to children, the elderly, and others. On its own, the government had neither the technology nor the infrastructure to establish an eco-money point system that integrates people’s credit card usage data and manage reward points. By engaging a credit card company as the initiative’s operator, the initial investment funds and technology were secured to set up the eco-money points system and Green Point of Sale (POS) in stores.

The initiative has been effective in closing the information gap and tackling price barriers that eco-friendly consumption has faced. Green Credit Card users are rewarded points when they buy various types of eco-labeled products, use public transportation, make paperless transactions, and consume less electricity, water, and gas. The Green Credit Card also offers discounts for electric car charging services and the purchase of recycled automobile parts. The rewards are converted into cash points called eco-money points and accumulated in the credit card system, later to be redeemable for cash or can be used for various purposes. Behavioral change is one of the many positive benefits of the Green Credit Card, as it educates users to be better informed before purchasing a product or a service. The Green Credit Card mobile application provides useful information on how the users can benefit from the initiative such as affiliated products, retail stores, and promotion events, thereby encouraging sustainable lifestyle choices. Moreover, public outreach is carried out for children, housewives, and people via social media and web-toons(comics) on major portal sites.

The Green Credit Card is the world’s first, nation-wide initiative that uses a credit card platform to provide economic rewards to instill eco-friendly behaviors. The credit card is currently the most commonly used medium of payment for using public transportation and purchasing products in Korea. The initiative was designed building on this behavioral norm so that it is convenient for users and fiscally sustainable. The Green Point of Sale (POS) system allows retail stores automatically identify eco-friendly products via a barcode scanner to ensure users to get eco-money points when they use their Green Cards for qualified purchases. In addition, by looking at the receipt and the mobile application, they can check which products are eco-friendly ones and how many eco-money points they have received from the purchase. Green POS information comes from an online database of eco-friendly products updated and managed by KEITI. Customer relationship management system analyzes Green Credit Card usages patterns by ages and gender, etc. The database is an effective tool to design the initiative tailored to the needs of the users. In addition, the analyzed data will be shared with manufacturers to encourage them to produce eco-friendly products in high demand.

In September 2009, the Eco Mileage Program was introduced by the Seoul Metropolitan Government to give incentives to households in Seoul that cut back on their use of electricity, water, and gas, which was welcomed by a great number of people. This economic incentive program has proven to be effective at motivating voluntary changes in lifestyle patterns. The Green Credit Card was introduced building on the success of the Eco Mileage Program. Participation of people in the Green Credit Card has increased exponentially as its target group and service coverage has significantly expanded. Namely, the initiative targets people nationwide and covers wide ranging eco-friendly consumption and lifestyles including purchasing choices and public transportation usages. In comparison to the Eco Mileage Program, the Green Credit Card Initiative is distinctively innovative for the following points: a) developing and installing the Green Point of Sale system in stores for the first time in the world, b) analyzing user patterns demographically to tailor the service offerings to each consumer group, and c) mobilizing financial resources to fund eco-money points from Green Credit Card payment fees.

The upfront investment costs of 2 million USD came from the BC card to set up the green POS in around 40,000 retail stores. An operating fund, which increased 14 times from 150,000 USD in 2011 to 2.1 million USD in 2017, was procured from a fee of 0.01–0.1% of the payments from Green Card. The government allocates about 200,000 USD every year for maintaining the gradually growing database. In terms of human resources, there are two officials from the Ministry of the Environment responsible for supervising the operations. Six researchers from KEITI are coordinating with ministries, local governments, and retailers; affiliating new services; running the steering committee; maintaining database; and conducting public outreach, etc. Six persons from the BC Card are operating “eco-money points system,” affiliating with financial institutions and managing customer relationship. The eco-money point system was established by building on the existing credit card point system managed by the BC card. Engagement of retailers was made possible with a series of consultations with KEITI and the BC Card, and by the decision that the BC Card covers the initial set up cost of green POS at retail stores.

Yes

According to the People’s Bank of China, by March 2016, the number of debit and credit cards issued exceeded 5.6 billion. These cards represent 48% of the payment means of the entire consumption within China. Against this backdrop, the International Ecological Economy Promotion Association (IEEPA) requested technical and institutional exchanges centered on the Green Credit Card Initiative in 2016, which has been considered a possible policy measure to promote more eco-friendly consumption in China. In 2017, KEITI, BC Card, IEEPA, and the Beijing Global Index Technology (BGIT) signed an MOU after reaching a mutual agreement for joint cooperation to introduce the Green Credit Card initiative in China. KEITI and IEEPA agreed to cooperate on information and technical exchanges to promote the program in China, and to assist related policy-making and system development. BC Card and BGIT organized a consulting project team to work on the program launch. As follow-up measures, information was shared through two rounds of policy and working-level discussions.

Social Sustainability The steering committee of the initiative convenes regularly with the participation of diverse stakeholders ranging from consumers, academia, the card company, and the government. A participatory decision-making process was institutionalized to direct the operations of the Green Credit Card initiative. Green Credit Card benefits have been added to a voucher-type card issued by the government for soldiers and housewives. Green Debit and Membership Cards have been also issued for groups such as children and the elderly in order to ensure equal access of the vulnerable to the benefits. As a special benefit of the Green Credit Card, the card holders can enjoy discounts on entrance or free access to welfare facilities, cultural, sports, and tourist attractions managed by local governments. Financial Sustainability This program is financially viable and does not require substantial government fiscal subsidization. More than 80% of financial resources required for the operation of the Green Credit Card program are funded by BC Card and retailers. The fund comes from profits of BC Card and retailers that are generated from the payment fees and purchases made by Green Card users. For the private sector, it is an economically sound business model that creates profits as well as contributes to reducing GHG emission and environmental pollutions. Thus, providers also gain an additional benefit of improving their brand image as socially responsible corporate. Environmental Sustainability GHG emission reductions and other natural resource savings come from eco-friendly consumption, use of public transportation, and at-home energy saving. An independent research institute was selected in 2012 to conduct research to examine the resource savings and GHG reductions driven by the use of the Green Credit Card. From July 2011 to the end of 2017, the Green Credit Card initiative was estimated to have reduced 3.4 million tons of CO2 equivalent emissions.

The Green Credit Card has been included as a key policy instrument of the “Five-Year Plan for Green Growth (2014-2018)” approved by the Prime Minister. The continued support was secured in allocating financial and human resources to the implementation of the initiative afterwards. In addition, it became easier to engage key stakeholders in the initiative as the decision was made based on the consensus among the academia, civic groups, private sector, ministries, and local governments. One advantage with the Green Credit Card is that new services can be easily added, which ensures service transferability. The number of participating retail stores increased from 751 in 2011 to 40,464 by the end of 2017, while the number of card issuers and the number of products covered by the initiative rose from 9 to 20 and from 539 to 2,419, respectively. The Green Credit Card continues to evolve to cater to a variety of populations. Consumption and behavioral patterns of people are monitored and analyzed in order to identify people’s demands and preferences. In addition, the beneficiaries of the initiative are regularly invited to express their opinions in decision making processes. The 2nd version of the Green Credit Card was introduced as a result of these efforts. In order to target environmentally conscious groups, discounts on electric vehicle charging were offered. In addition, discounts on paperless, mobile movie tickets were added to the services, which attract users in their teens and 20s. As a result, the number of cards issued continues to rise. In the future, there is a plan to offer rewards for online purchase of eco-friendly products, as there are growing number of credit card users making online transactions.

Yes

A public opinion survey has been carried out once a year since 2012 to monitor people’s awareness, user satisfaction, and perceptual changes after using the Green Credit Card. The survey is conducted by an independent research institute to ensure the fairness of the results. One thousand respondents between 19 and 60 years old are sampled by age and gender and in proportion to the local population. One-on-one interviews are done using a structured questionnaire. The outcomes are publicly disclosed on the website of the KEITI and used to evaluate whether the initiative makes positive impacts on perceptual and behavioral changes leading to sustainable lifestyles. The amount of eco-money points accumulated in each segment including consumption, transport, and residential sector is automatically monitored in connection with IT system including Green POS. This data is used to judge whether the initiative contributes to promoting sustainable lifestyles of the users over time. Media coverage is monitored on a regular basis to evaluate the social impact of consumption based on the Green Credit Card initiative. Winning an award for sustainability programs organized by an international body would give an opportunity to evaluate and prove the excellence and global transferability of the Green Credit Card initiative.

In the 2017 public opinion survey, 61.8% of respondents were aware of the Green Credit Card and 84.1% expressed user satisfaction. More than 64% of users reported increased interest in green products and energy saving while more than 62% responded that eco-friendly products were now a priority in purchasing choices and they now used public transportation more. This indicates that there are positive behavioral changes of the users. The number of cards issued was 16.4 million as of the end of 2017. The number of eco-friendly products purchased using the card has increased 1.3 times from year to year to reach around 2.5 million products in total. Transportation fees paid using the Green Credit Card have risen by 73 times to 182.9 million USD in 2017 compared to 2011. Such strong continuous increases in the number of users enjoying the Green Credit Card services are the evidence of positive impacts. The Green Credit Card initiative has been recognized for excellence, innovativeness, and replicability overseas by receiving the 2017 UN Climate Solutions Awards. Meanwhile, media coverage has increased more than 4 times in 2017 compared to 2015 through TV, radio, newspapers and online media outlets, which can be another indication of increased positive social impacts.

To understand how well people in general are aware of the Green Credit Card, indicators were developed to measure awareness, user satisfaction, and perceptional/behavioral changes. Such indicators are used in an annual survey. Participation of people is evaluated using the indicators for the number of cards issued and of accounts active, which are tracked by the operator, BC Card, once a month. Changes in people’s lifestyle toward sustainability are evaluated using the indicators for the amount of eco-money points accumulated, the number of transactions processed for eco-friendly products and the accumulated amount of fees paid for public transportation, which are tracked by the operator once a month. Indicators for the rate of local facilities use are evaluated using the indicator for the number of visitors and the amount of points given, which are tracked twice a year in cooperation with local governments. The social impact of the Green Credit Card is tracked directly by following online and offline media coverage on a monthly basis.

Designing Korea’s Five-Year Plan for Low Carbon Green Growth of 2009 called for introducing a concrete measure to encourage sustainable lifestyles. In 2011, the Green Credit Card initiative was designed by the Green Consumption Forum which was consisted of representatives from the government, academia, civic groups, and product distributors. Then, BC Card was selected as an operator of the Green Credit Card. Implementation The Ministry of Environment and KEITI are responsible for identifying and linking various incentive programs based on consumer needs; engaging and coordinating stakeholders including ministries, local governments, and retailers; and running the Steering Committee. At present, 4 ministries, 17 local governments, and 19 retailers are engaged in the initiative. BC Card is responsible for aligning financial institutions for issuing the Green Credit Card, supporting the installation of the Green POS system in stores, and operating the eco-money points system. At present, the Green Credit Card is issued by 20 financial institutions and can be used in around 40,000 stores including mega marts, department stores, and organic grocery stores throughout Korea. Performance targets for the initiative are jointly set by KEITI and BC Card in order to provide the consistent and continued service for the users. The outputs of each organization are evaluated annually along with other key performance indicators. Evaluating The Steering Committee consists of representatives from the academia, experts, consumer groups, and the government and is convened two to three times a year to review the progress and approve the future plans for the initiative. Dialogue with retailers participating in the initiative is organized once a year to encourage eco-friendly consumption. For further improvement, consumer opinions are collected through a public opinion survey once a year and dialogue with the Green Credit Card users .

This initiative, being user-friendly, has successfully attracted many people and continues to shape sustainable consumption and lifestyle patterns. The new edition of the Green Credit Card is under development in order to adapt to the new consumption trends and provide more user-friendly services. Online shopping and mobile payments applications are growing in popularity in Korea, and in 2017, transactions of online shopping amounted to 78.2 billion USD. Therefore, efforts are being made to reward the purchase of eco-friendly products at online stores, and to link Green Credit Card services with mobile payment applications. The Green Credit Card aims to address a wide range of the Sustainable Development Goals in the long run. As part of this, a series of consultation with service providers are underway to reward consumers for using rental services (e.g. car sharing) and purchasing used products (e.g. used books and toys). By doing so, it is expected to contribute to accelerating the shift to sharing and circular economy. In addition, public outreach is planned to improve accessibility of the vulnerable to the Green Credit Card benefits in cooperation with community centers, social welfare facilities, etc.