Mastercard Corporate Sustainability Report 2018
Doing well by doing good Corporate Sustainability Report 2018 00 01 02 03 04 05 INTRODUCTION ABOUT INCLUSIVE INSPIRED ENVIRONMENTAL ETHICAL AND MASTERCARD GROWTH WORKFORCE STEWARDSHIP RESPONSIBLE STANDARDS
CEO letter Who we are Our approach Our approach Our approach Our approach Highlights Innovation and new Mastercard’s Global inclusion Ensuring our Ethics and technologies commitment to and diversity sustainability compliance inclusive growth Sustainability at Recruiting and retaining Environmentally Responsible risk Mastercard Solutions for inclusion a diverse workforce conscious solutions management Sustainability Financial literacy Attracting and engaging Privacy, data governance top talent protection and safety Data for good and security solutions Stakeholder Employee health engagement Community support and well-being Human rights and and development responsible sourcing About this report Employee volunteerism and philanthropy
Assurance letters GRI index
1 cities of the future. And it is “It’s time for ‘doing as much about inspiring the best and brightest talent to drive our company’s innovation well by doing good’ as it is about infusing them with the ethics that guide the way we manage the business, to become business treat customers and contribute to society. All that is just a taste of as usual.“ what we’re delivering on today. Our purpose drives us forward. Our sense of Mastercard as a Why? Because when the world the ethical standards to which member of society, with the thrives, businesses thrive. we hold ourselves accountable — responsibility to benefit people Businesses are part of because the ways and means and partners, shareholders and the global ecosystem. And matter, too. customers alike, compels us to ecosystems, by definition, require As the digital economy make more connections, further balance and diversity. They also increasingly becomes the amplifying the network effect. require a point of view larger economy, it is both our business We’re working to scale “Doing than oneself and longer than the strategy and our social Well by Doing Good” by making immediate future. They require responsibility to ensure that commercially sustainable social an understanding that we are people and organizations have impact the new paradigm for stronger as a connected whole access to the networks, tools business as usual, because we than as isolated actors. and solutions that can help them believe being purpose-driven is At Mastercard, this is what reach their potential and achieve fundamental to sustainability — we call the network effect: the financial security. That means for everyone. idea that the value of the total approaching everything through is greater than the sum of its the lens of our culture of decency parts, and that enabling the and using our technology and whole system benefits all the experience to empower each components. Our network is individual — no matter where the foundation of our business they come from — as well as the and how we operate. It’s what system as a whole. Ajay Banga, allows us to make inclusive Our work is as much about president and CEO, growth a reality — because we’re connecting farmers in developing Mastercard activating our network to enable regions to a digital marketplace the digital economy to work for as it is about working with a everyone, everywhere. And we’re range of public and private doing it in ways that consider our partners to build the inclusive, workforce, the environment and accessible and sustainable 2 Mastercard is proud to contribute to a sustainable and inclusive future. Below are highlights from our 2018 annual corporate sustainability report:
INCLUSIVE INSPIRED ENVIRONMENTAL ETHICAL AND GROWTH WORKFORCE STEWARDSHIP RESPONSIBLE STANDARDS We are dedicated to building an inclusive world The success of our business is inextricably tied At Mastercard, we have set ambitious goals and are Our success is tied in part to the trust that people in which the digital economy works for everyone, to our people. Mastercard relies on our global taking action across our company and supply chain place in us to deliver our products and services everywhere. By creating scalable solutions for workforce to help us achieve our goal of building to continuously improve the environmental footprint in the right way. For us, acting ethically and sustainable and inclusive economic growth, a sustainable, inclusive global economy, and we of our offices and operations. We also take responsibly is not only the right thing to do, but we can build pathways to a more secure work to make our company the place where the advantage of opportunities to apply our people, also the right way to do business. future for everyone. best people choose to be. assets and innovation to contribute environmentally • Our enterprise-wide Code of Conduct guides • Together with our partners, we have • We continued our progress toward gender conscious solutions for a more sustainable future. our Ethics and Compliance system and sits reached more than 400 million people equity and equal pay for equal work, with • Mastercard is the first in the payments at the foundation of our culture of decency. previously excluded from financial services our female employees earning $0.996 for industry to receive external validation of It shapes how we manage our business, treat toward the goal of providing access to 500 every $1.000 earned by men. our science-based target to reduce our our customers and contribute to society. million by 2020. • In addition to expanding our generous greenhouse gas (GHG) emissions 20% by • We continued our compliance efforts to the • Mastercard pledged $500 million for employer contributions to employee 2025, from a 2016 baseline. European GDPR by appointing a Europe-based inclusive growth and established the retirement plans, we strengthened • We source renewable energy for 100% of our Data Protection Officer to oversee our ongoing Mastercard Impact Fund. To date, the our employee health and well-being global operations, and we are committed to compliance with the General Data Protection Fund has committed more than $40 million programs to further support employees maintaining this goal on an ongoing basis, Regulation (GDPR) and by our launch of in grants. in their physical, emotional and financial even as our energy footprint expands. Trūata, an independent data trust working • To date, the Center for Inclusive Growth has well-being. • We are pioneering environmentally conscious to anonymize data and continue providing collaborated with more than 50 research • Our employees supported more than solutions and cross-sector partnerships, such analytic services in a GDPR-compliant manner. organizations and fellows and invested 2,200 charities through monetary as the Greener Payments Partnership and We expanded our commitment to ethical in programs reaching more than 575,000 donations or by contributing nearly the UN Global Compact Cities Programme, to data practices by making the core consumer people in 17 countries. 70,000 volunteer hours, including help consumers, businesses and cities lessen protections of the EU-GDPR available to • In early 2019, we launched a Data Science through more than 75 events at which their impact on the planet. individuals in other jurisdictions by the end of for Social Impact collaborative with the our employees served as educators, role • We launched City Possible, a new model the first quarter of 2020. Rockefeller Foundation, which will increase models and mentors for our signature for urban collaboration that brings cities, • We continued to leverage our innovation the capacity of social sector organizations Girls4Tech STEM education program. companies and communities together to expertise in developing the next generation and government to solve systemic problems. identify common challenges and create of technologies to make payments faster, solutions that can be scaled up broadly. more convenient and more secure.
This report covers the 2018 fiscal year, spanning Jan. 1 to Dec. 31, 2018. In some cases, we include data and information about programs and activities relevant to our corporate sustainability priority areas that occurred in the 2019 fiscal year, as noted. 3 ABOUT 01MASTERCARD
4 WHO WE ARE Mastercard is a technology company in the global payments industry that connects consumers, financial institutions, merchants, governments, digital partners, businesses and other organizations worldwide, enabling them to use electronic forms of payment instead of cash and checks.
5 Key results in 2018
$5.9 trillion Our brands Gross dollar volume We make payments easier and more efficient by creating a wide range of payment solutions and services, using our family of well-known brands, including Mastercard®, Maestro® and Cirrus®.
More than 150 currencies and 210 countries and territories 2.5 billion 73.8 billion We authorize, clear and settle Mastercard- and Maestro- Transactions switched transactions through our core branded cards in use network for our issuer customers around the world.
6 The following diagram depicts a typical Our core business transaction on our core network, and our role in that transaction: Our core network supports We operate in a dynamic what is often referred to as and rapidly evolving legal and a “four-party” payments regulatory environment, with network. Through our core global heightened regulatory and payments processing network, legislative scrutiny, expansion of we facilitate the switching local regulatory schemes and other (authorization, clearing and legal challenges, particularly with How we settlement) of payment respect to interchange fees. These Core Network make money transactions and deliver related challenges create both risks and products and services. opportunities for our industry, as Mastercard does not issue cards With additional payment detailed in our annual report. Switching or other payment devices, extend Authorization capabilities that include real- Clearing credit to account holders or Settlement time account-based payments, Acquirer Issuer determine the interest rates or other including automated clearing fees charged to account holders. house (ACH) transactions, we Payment System Security Each issuer determines these and offer customers a single partner most other competitive payment
to turn to for both domestic and Value-Added Products program features. In addition, we cross-border needs. and Services do not establish the discount rate Loyalty and Rewards that merchants are charged for Analytics Insights and Consulting Processing acceptance, which is the responsibility Safety and Security of our acquiring customers. OUR CORE NETWORK We generate revenues from: SUPPORTS WHAT IS Enabling Digital Payments • Assessing our customers based on the gross dollar volume (“GDV”) of OFTEN REFERRED TO AS Account activity on the products that carry A “FOUR-PARTY” Merchant Holder our brands * • The fees we charge to our customers PAYMENTS NETWORK for providing transaction-processing • Other payment-related products and services
* To learn more about our “Four-Party” payments network, click here. Mastercard is a publicly traded company listed on the New York Stock Exchange. Our headquarters is in Purchase, New York. As of Dec. 31, 2018, Mastercard and its subsidiaries owned or leased 169 commercial properties. 7 Digital enablement and digital payments Leveraging our global innovations Simplifying access to, and capability, we work to digitize integration of, our digital assets payment services across all Our Mastercard Developer platform channels and devices. makes it easy for customers and partners to leverage our many digital Delivering better digital assets and services. Our best-in-class experiences everywhere Application Program Interfaces (APIs) We are using our technologies and enable easy integration of our services security protocols to develop solutions into new and existing solutions. to make digital shopping and selling experiences, such as on smartphones Identifying and experimenting and other connected devices, simpler, with future technologies, faster and safer for both consumers startups and trends and merchants. We also offer products Through Mastercard Labs, our global that make it easier for merchants to innovation and development arm, accept payments and expand their we continue to bring customers and customer base, and we are developing partners access to thought leadership, products and practices to facilitate innovation methodologies, new acceptance via mobile devices. technologies and relevant early- stage fintech players. Securing more transactions We are leveraging tokenization, biometrics and machine-learning technologies in our push to secure every transaction. These efforts WE ARE LEVERAGING include driving EMV-level security TOKENIZATION, BIOMETRICS and benefits through all our payment channels. AND MACHINE-LEARNING TECHNOLOGIES IN OUR Digitizing personal and business payments PUSH TO SECURE EVERY We provide solutions that enable our TRANSACTION financial institutions and merchants to offer consumers the ability to send and receive money quickly and securely to any destination, globally and in real time.
8 Strategic partners We work with a variety of stakeholders to conduct our daily business and achieve our long-term strategy. We provide financial institutions with solutions to help them increase revenue by Grow Diversify Build Our teams are innovating to driving preference for Mastercard- create solutions that meet the branded products. We help needs of our consumers and merchants, financial institutions CORE CUSTOMERS AND NEW AREAS merchants, and applying emerging and other organizations by GEOGRAPHIES Credit Data analytics technologies to maximize our delivering data-driven insights Debit Financial inclusion Consulting, Managed Services opportunities around the world. and other services that help Commercial New markets Safety and security We are working with EMVCo— them grow and create simple Prepaid Businesses Loyalty and processing the global consortium that and secure customer experiences. Digital-physical convergence Governments New payment flows develops and maintains payments We partner with technology Acceptance Merchants standards — to support the companies such as digital players Digital players development and implementation and mobile providers to deliver Local schemes/switches of a simple and unified digital digital payment solutions powered experience for consumers, issuers by our technology, expertise and merchants. Taking the form and security protocols. We help national and local governments ENABLED BY BRAND, DATA, TECHNOLOGY AND PEOPLE of a common checkout button, we announced plans to enable token drive increased financial inclusion services on all cards, removing the and efficiency, reduce costs, primary account number from the increase transparency to reduce transaction flow. crime and corruption, and advance social programs. For consumers, we provide faster, safer and New payment flows more convenient ways to pay Our strategy: grow, diversify, build In order to help grow our business and transfer funds. and offer more electronic We grow, diversify and build our payment flows, such as business- payment options to consumers, business through a combination to-business (B2B), person- businesses and governments, of organic growth and strategic to-person (P2P), business-to- Mastercard has developed and investments. consumer (B2C) and government enhanced solutions beyond the Growing our business includes payments, through a combination principal switching capabilities supplementing our core network of product offerings and expanded available on our core network. with enhanced payment solutions for our customers. capabilities to capture new
9 DDED OFF E-A ERI LU NG VA S Our products Processing We extend our processing LOYALTY PROCESSING and services AND REWARDS capabilities in the payments D value chain in various regions DIT EB E IT We provide a wide variety of R and across the globe with an C P integrated products and services R R expanded suite of offerings. E E
P M Core
supporting payment products A These include issuer solutions
U
I D
that customers can offer to their S Products and payment gateways that
N
O
account holders. C offer a single interface to C O
SAFETY AND M
M
L CONSULTING A E I provide e-commerce merchants R SECURITY C with the ability to process secure online and in-app payments. We also offer value-added solutions
ANALYTICS and mobile gateways that INSIGHTS facilitate transaction routing and processing for mobile- initiated transactions. Core Value-added products Analytics insights offerings and consulting Consumer credit Prepaid We also provide value-added We provide proprietary We offer a number of programs Prepaid programs involve offerings such as safety and analysis, data-driven that enable issuers to provide a balance that is funded security products, information consulting and marketing- consumers with credit that prior to use and can be accessed and analytics services, consulting, services solutions to help clients allows them to defer payment. via one of our payment products. loyalty and reward programs, and optimize, streamline and grow issuer and acquirer processing. their businesses, as well as deliver value to consumers. Debit Commercial Safety and security Loyalty and rewards We support a range of payment We offer commercial payment We offer integrated products We have built a scalable products and solutions that products and solutions that and services to prevent, detect rewards platform that enables allow our customers to provide help large corporations, midsize and respond to fraud and financial institutions to provide consumers with convenient companies, small businesses cyberattacks and to ensure consumers with a variety of access to funds in deposit and and government entities. the safety of transactions made other accounts. using Mastercard products. benefits and services.
10 Innovation portfolios Innovation portfolios define our focus as we explore areas that include AI Solutions, Strategic Growth, New Payment Flows, Provenance, and Digital Payments.
AI STRATEGIC SOLUTIONS GROWTH
INNOVATION AND This keeps us at the frontline and transact faster, simpler, more NEW TECHNOLOGIES of emerging technologies and convenient and more secure. game-changing trends that cut We worked on developing across our products and services. products and services that Mastercard Labs is looking to improve payments, supply chain At Mastercard, innovation the future today as we pursue management and pay-as-you-go transformational opportunities initiatives leveraging technologies NEW PAYMENT PROVENANCE is deeply woven into our to deliver growth for Mastercard such as artificial intelligence, FLOWS and our customers. We co-create biometric authentication and company culture. We breakthrough solutions with blockchain, to name a few. customers beyond the payment, Guided by principles that continuously experiment and keeping pace with the evolving foster creativity, collaboration explore ways to transform needs of consumers. Our agile and speed, Labs creates the approach enables us to de-risk environment and provides the our network, operating the development and execution tools to accelerate innovation for DIGITAL of new products and services, Mastercard and our partners. PAYMENTS models and mindset. helping to make how we interact
11 Labs as a Service Research and Our Labs as a Service team works externally with customers Development to transform their businesses. Since 2015, we have executed At Labs, the Research and on nearly 300 engagements Development team works with around the world with clients cutting-edge technologies, in the airline, banking and retail including blockchain, mixed Innovation industries, among others. Our reality and artificial intelligence, flagship service is Launchpad, to explore the market value of Management a rapid prototyping, rapid- new solutions. Headquartered design, co-development sprint, in Dublin, we bring a truly global Innovation at Mastercard is more during which our innovation focus, with team members from than the work of Labs. Every specialists — user experience Singapore to Pune, Nairobi, New aspect of our organization — and interface designers, as York and San Francisco. from accounting to engineering— well as software engineers— Our deeply skilled technical needs to think and operate work side-by-side with our team utilizes lean startup differently to help Mastercard clients’ product teams to ideate principles and agile engineering instill an execution mindset and design new digital products. to validate whether we have a across the enterprise. We are With our co-creation robust solution to an existing building the foundation to foster methodologies and tools, we problem or a still-unmet need. internal innovators to develop help clients reduce product We then test for the solution‘s execution skills by implementing development cycles and compress desirability, product-market fit tools such as design thinking. months of work into shorter time and viability. From there, we look We launched Innovation periods. We partnered with a for commercial opportunities Week, a five-day global program global bank looking to elevate its and build the framework through sponsored by senior executives payments capabilities. We helped transition to full-scale launch. that featured nearly 200 events. it bring a wearable payment Our team experiments and More than 260 ideas were product to market in fewer than iterates continuously to help generated by Take Initiative, our 10 months. By combining our Mastercard and our partners global hackathon that brings global expertise with startup unlock the commercial potential together cross-functional teams. agility, we deliver lasting benefits of emerging technologies. As we look to the future, our in our pursuit of groundbreaking Innovation Management team solutions for customers. is developing accelerated work sessions (focused on ideation and commercialization and innovation- as-a-service) to improve the execution and delivery of new products and services. 12 Lab for Provenance Financial Inclusion The world is more connected Whether we’re partnering Our Dublin Tech Hub became With 1.7 billion adults lacking access than ever, and cross-border with startups, mining home to an AI practice built to basic financial tools and services, trade in goods and services innovation from within or by Mastercard Labs. The AI there is a critical need to develop has grown with technological piloting new technologies to practice is focused on leveraging products and services that can help innovation and the globalization accelerate business growth, the power of machine learning, Start Path people in underserved communities of commerce. Mastercard Labs is shaping predictive analytics and other thrive. The Nairobi-based Mastercard As a result, companies are the future of commerce with advanced technologies to Our deep connection to startups leads Lab for Financial Inclusion has managing complex supply chains and for our customers across improve existing products and to new insights beyond payments. created groundbreaking solutions to and an ever-growing number of the globe. develop new products. The Start Path is our award-winning help individuals better manage risk, moving parts — raw materials, team has already applied AI to program that provides support to financially plan for the future and operational processes, finished improve our “Security by Design” innovative, later-stage startups. We lead empowered lives. products and suppliers. At the Tech Hubs methodologies to further provide operational scale support The Lab focused on scaling its same time, consumers and upgrade our fraud detection and connect these companies to our solutions across multiple markets. The companies alike are increasingly Mastercard Tech Hubs are in payments. own Mastercard executives, as well award-winning Mastercard Farmer interested in how sustainably and specialized workplaces Our Sydney Tech Hub as to leaders from partner financial Network, which digitizes marketplaces, equitably goods are produced and designed to create a culture of opened in a world-class facility institutions, the tech industry and payments and transactions for farmers, delivered from the factory to the collaboration and innovation. that closes the gap among global retailers, to create the future was launched in India in partnership with point of sale. These offices in our key employees and customers, of commerce together. the Government of Andhra Pradesh. Mastercard’s Provenance markets around the world are products and development. The Start Path team vetted more Kupaa, an education payments platform solution addresses this growing staffed with cross-functional Among the projects the Sydney than 1,400 applicants in 2018 and developed with UNICEF, was adopted demand by providing the tools innovation teams working in Tech Hub has already begun has partnered with more than 200 by more than 300 schools in Uganda. to trace a product’s provenance, an empowering environment to address are Smart Cities global startups over the past five years And following a successful pilot in East from origin to end consumer. Using that helps technologists and technologies. We are working in areas as diverse as digital identity, Africa, Kionect, a multi-sided supply chain our extensive capabilities with technologies to thrive. with Transport for New South health care, security and more. For platform that enables the growth of blockchain technologies, artificial Our five Tech Hubs — in Wales to bring contactless example, Mastercard is working with unbanked small merchants by efficiently intelligence, fraud solutions, brand- St. Louis, New York, Dublin, ticketing to Sydney Ferries MAX, a Nigeria-based motorcycle-share linking them to financial service providers, protection programs and our Pune and Sydney — are home and Light Rail, which will allow company, to provide digital payment is poised to scale in Egypt. global networks, we have built a to a diverse mix of local, commuters, for the first time capabilities and installments for typically With the support of the Bill and scalable, flexible solution to help regional and global teams in Australia, to purchase transit unbanked riders, enabling riders to Melinda Gates Foundation to support companies achieve transparency working autonomously and fares via their Mastercard purchase motorcycles over time and, these projects, the Lab brings together with their partners while also in global alignment to achieve contactless cards or mobile as a result, build their credit profiles. Mastercard's innovation and global stopping counterfeit trade, our commitment to operate wallets. Collectively, the startups in the financial inclusion capabilities under one complying with regulations and and deliver “Faster, Better program have raised more than roof, combining these with local expertise supporting greater sustainability. and Smarter.” $1.3 billion in capital investment. and insight to empower the underserved.
13 SUSTAINABILITY AT MASTERCARD
As a global company that serves our investments in this area. That is the root of doing well by doing good — an customers in more than 210 countries approach to sustainability that supports Mastercard’s business vision and aligns and territories, we understand how with our strategy. interconnected the world is, and we • Our vision: A World Beyond Cash® see firsthand how our commitment to • Our mission: Every day, everywhere, we use our technology and expertise environmental and social responsibility — to make payments safe, simple and smart. and our core value of operating ethically • Our commitment: We’re committed and responsibly — is directly connected to being a force for good in the world and to doing well by doing good. As a to our continuing success as a business. core component of our strategy, we’re conducting business in an open and transparent way, advancing inclusive growth, building an inspired workforce This understanding is foundational and the more the benefits of that and being good stewards of the to our approach to sustainability: growth are widely shared. Doing environment to create a sustainable doing well by doing good. We well by doing good means greater future for Mastercard and the world recognize that Mastercard cannot opportunities for individuals around us. succeed in a failing world. We and businesses of all sizes, while thrive when economies thrive, also creating stronger financial and a successful economy is institutions and more effective sustainable only when it is governments. A SUCCESSFUL inclusive and when prosperity To achieve this vision, we must is shared. examine our technology, our ECONOMY IS We envision — and we are products and our business models SUSTAINABLE working toward — a world in which to determine how they can best people are on a path of shared be applied to improve our social ONLY WHEN IT IS prosperity. The more people join impact. And if we are to make the formal economy and begin to that social impact scalable and INCLUSIVE AND earn, spend and save, the greater sustainable, we must be able to WHEN PROSPERITY our collective economic growth, see the commercial benefit of IS SHARED
14 Environmental Stewardship We understand the importance of addressing environmental sustainability and have undertaken a variety of initiatives regarding greenhouse gas emissions, real Inclusive Growth estate, energy, landfill diversion We combine expertise, data, and transportation, as well as technology and philanthropic products and services. investments to empower those working on the front Ethical and Responsible lines of inclusive growth. We Standards Materiality and bring together businesses, Ethics and compliance are embedded our focus areas governments, academic in our core values, and we take a institutions and nongovernmental proactive approach to conducting To help determine the priority organizations to create new business in a trusted and transparent areas for Mastercard’s models of collaboration that way. Mastercard fosters sound sustainability work, in 2016 we ignite inclusive growth. governance through an independent conducted a materiality analysis board structure and robust risk and in partnership with Business Inspired Workforce compliance programs. for Social Responsibility (BSR), At Mastercard, our industry a global nonprofit business expertise is enhanced by the network and consultancy diverse insights of our global Mastercard believes it is good dedicated to sustainability. We workforce. Our dedication to practice to internally review prioritized topics across two cultivating an environment for our material issues each year, dimensions: their influence on all employees that respects their as we have this year with our our business success and their individual strengths, views and partner BSR. importance to our external experiences drives a global and In addition, every few years we stakeholders. We also conducted collaborative culture of inclusion. plan to conduct a more formal a current-state assessment that materiality refresh that will helps us understand how we are involve a variety of external managing our priorities. and internal stakeholders. Informed by this assessment, as well as by our ongoing engagement with stakeholders, we focus on WE SET PUBLIC SUSTAINABILITY four priority areas, each of which TARGETS AND FORGED includes several topics: PARTNERSHIPS TO FURTHER OUR SUSTAINABILITY WORK
15 SUSTAINABILITY GOVERNANCE Board structure Sustainability at Mastercard is driven from the top by our BOARD OF DIRECTORS Board of Directors and CEO. Oversees major risks
Strategic and competitive Brand and reputational Operational CEO succession The Nominating and Corporate of growth, the CSO reports to Financial Legal and regulatory Cybersecurity planning Governance Committee of our the Vice Chairman and President Board of Directors considers of Strategic Growth, who reports issues significant to the company directly to the CEO. Mastercard with respect to corporate has set public sustainability targets social responsibility and diversity and forged partnerships to further initiatives, as well as any concerns our sustainability work. raised by stockholders. For example, we launched the Other topics included in this Greener Payments Partnership report that are the subject of with three of the industry’s leading AUDIT HR AND COMPENSATION NOMINATING AND presentations to the Board and card manufacturers to develop COMMITTEE COMMITTEE CORPORATE GOVERNANCE its committees by senior executives environmental best practices and Primary risk oversight Primary risk oversight COMMITTEE include risk management, diversity, reduce first-use polyvinyl chloride, Primary risk oversight our environmental initiatives or PVC, in card manufacturing. Financial statement integrity Employee compensation and reporting policies and practices Governance structure and more. Mastercard also proudly joined and processes Our senior management team Queen Máxima of the Netherlands’ Major financial and other Non-executive director works together to support our CEO Partnership for Economic business risk exposures compensation policies Legal and policy matters culture of doing well by doing good Inclusion, a United Nations initiative and practices with potential significant Information security, across the organization, advancing intended to grow sustainable reputational impact technology, and privacy Succession planning our global sustainability efforts. private-private financial inclusion and data protection Stockholder concerns (including This includes understanding efforts. And we partnered with sustainability and diversity) how we can best engage with IBM to launch Trūata, a data trust Risk management framework our customers and others in working to anonymize data while the payments ecosystem to providing General Data Protection Legal, regulatory and compliance Regulation (GDPR)-compliant address broader social issues in Internal controls MANAGEMENT a constructive way. analytics services. Mastercard appointed our These partnerships guide first Chief Sustainability Officer us as we work to create a BUSINESS UNITS CENTRAL FUNCTIONS INTERNAL AUDIT (CSO). Tasked with integrating comprehensive approach to sustainability initiatives across sustainability, articulating that Identify and manage business risks Design risk framework, including Provides independent assurance on business units and leveraging approach in a clear, unified way. setting boundaries and monitoring design and effectiveness of internal them as enterprise-wide drivers risk appetite controls and governance process 16 STAKEHOLDER ENGAGEMENT At Mastercard, we welcome Memberships Awards the views of diverse In addition to our broad Mastercard is honored to stakeholders, internal and community of stakeholders, Mastercard is an active have earned recognition for external, who serve as key participant in a number of partners in identifying the sustainability membership our environmental, social organizations and peer networks environmental, social and focused on environmental, social and governance work. and governance topics. governance issues that are Our membership in these groups allows us to learn from We received the following sustainability most material to our business, other companies’ sustainability recognition, among others listed in the efforts and share our own best relevant chapters of our report: and where we can make the practices with our peers. Our biggest impacts. memberships include: • BSR • CECP • Conference Board • Corporate Eco-Forum Stakeholders • Global Reporting Initiative We regularly engage with these • GreenBiz Executive Network • Green Lease Leaders Dow Jones Sustainability stakeholders to ensure that North America Index we understand their views and • Sustainability 50 sustainability concerns. Some (part of World 50) FTSE of Mastercard’s key stakeholder • Sustainability Council 4Good Index categories include: • Sustainable Brands • Civil society organizations • Sustainable Purchasing Fortune • Employees Leadership Council World’s Most Admired Companies • Financial institutions, merchants • UN Global Compact and other business partners • U.S. Green Building Council • Governments • International organizations • Investors • Regulators
17 Mastercard is most closely Supporting the addressing these goals: 1. Zero Hunger (Goal 2), Good 3. Decent Work and 5. Partnerships for the Goals Financial inclusion UN Sustainable Health and Well-Being (Goal 3) Economic Growth (Goal 8): (Goal 17): partnerships Development Goals and Quality Education (Goal 4): One way we are lifting individuals In partnership with Unilever, Mastercard and the World Food out of poverty and supporting Mastercard is unlocking growth Core to our business objectives, Our business goals and the UN Programme are working together the overall economic growth of for micro-merchants through as well as our sustainability Sustainable Development Goals to reverse the cycle of hunger local communities is through the an innovative digital supply initiatives, is our work to (SDGs) are inextricably linked. and poverty. We are connecting Mastercard Farmer Network. chain platform. Our Jaza Duka connect the underbanked and Our technology, expertise Mastercard’s partnership network This mobile platform digitizes system (Swahili for “fill up your unbanked to formal financial and approach to partnership are and digital innovation with the agriculture marketplaces, store”) helps shopkeepers use services as a way of driving helping drive implementation and World Food Programme’s work payments and workflows, their purchasing history — rather shared economic growth. scale for the global goals, while in providing vital food assistance providing farmers an easy and than the formal credit history or Mastercard is involved in a advancing our mission to create and resilience-building programs secure way to buy, sell and collateral that lenders normally number of partnership efforts a more inclusive economy. In to vulnerable communities. We receive payments for agricultural require — to access microcredit. that approach financial inclusion active support of these goals, we contributed 33 million meals products through their feature This frees them to buy and sell through financial innovation, have programs in more than 60 as part of our commitment to phones. (Read more on page 30.) more goods, opens doors to other policymaker and key-stakeholder countries designed to reach the provide 100 million meals in total financial service products in the engagement, financial education, financially excluded. through partnerships with NGOs 4. Sustainable Cities and future and helps entrepreneurs philanthropy and academic and our customers around the Communities (Goal 11): avoid needing to borrow from research. Our partnerships include: world that raise visibility for the Through City Possible, a new informal lenders at high interest • Alliance for Financial Inclusion cause and incentivize donations. public-private partnership rates, which can trap them in a • Better Than Cash Alliance Our partnerships have enabled model powered by Mastercard, cycle of debt. Jaza Duka is one • CEO Partnership for us to further support health and participating cities can access example of how Mastercard Economic Inclusion education improvement initiatives a network to identify shared is developing new models of globally. (Read more on page 37.) challenges and seek sustainable partnership for commercially • G20 Global Partnership business models to address sustainable social impact. for Financial Inclusion 2. Gender Equality (Goal 5): them. City Possible provides a (Read more on page 31.) • International and regional Mastercard’s signature STEM framework to co-create, pilot and development banks education platform, Girls4Tech, scale solutions, connecting cities • International Finance was created to inspire girls with private-sector players that Corporation to pursue STEM careers and are equally committed to people- • International help narrow the gender gap centered design. (Read more on Telecommunication Union in technology fields. Since the page 74.) • United Nations agencies program launched in 2014, we • World Bank Group have reached more than 400,000 • World Economic Forum girls and are well on our way to achieving our goal of reaching more than 1 million by 2025. (Read more on pages 33 and 54.) 18 ABOUT THIS REPORT This report covers the 2018 fiscal year, spanning Jan. 1 to Dec. 31, 2018. In some cases, we include data and information about programs and activities relevant to our corporate sustainability priority areas that occurred in the 2019 fiscal year, as noted.
Reporting history External Report scope and frequency assurance
Unless otherwise noted, the Mastercard published its first Mastercard did not employ an information in this report covers corporate sustainability report external agency or organization Mastercard’s global operations. in 2018, documenting the 2017 to audit the contents of this Our corporate sustainability report fiscal year and presenting report. However, certain focuses on our efforts in four key highlights from our long- elements of our external areas as noted in the highlights standing sustainability efforts. disclosures have gone through and presented in greater detail Previously, Mastercard had external independent assurance. throughout the report. reported on our commitment This includes calculations • Inclusive Growth and approach to sustainability of our greenhouse gas (GHG) via our website, our annual proxy emissions and reduction targets. • Inspired Workforce disclosure, Carbon Disclosure The assurance letters are • Environmental Stewardship Project (CDP) and other sources. included in this report on page 93. • Ethical and As we continue our journey of Information about our business Responsible Standards innovation, transformation and and financial performance is In selecting content for inclusion in leadership, we regularly review provided in our 2018 annual our 2018 report, we used the Global our strategy and approach to report and quarterly Securities Reporting Initiative (GRI)’s reporting corporate sustainability. This and Exchange Commission filings. principles of materiality, sustainability ongoing analysis helps us to Please direct questions on this context and stakeholder inclusiveness identify and prioritize the issues corporate sustainability report or and completeness, as well as the UN relevant to our business and our topics relating to our corporate Sustainable Development Goals. This stakeholders. Our materiality responsibility activities to report was prepared in accordance analysis with BSR and the priority [email protected]. with the GRI Standards: Core option. areas identified in that process An index of the relevant GRI were incorporated in the approach disclosures can be found on page 94. and content of this report. 19 INCLUSIVE 02GROWTH
20 OUR APPROACH At Mastercard, we envision a world in which economic growth is inclusive and sustainable and the digital economy works for everyone, everywhere. As the global economy increasingly goes digital, all people should have access to the tools and the networks that are key to their prosperity.
21 OUR INCLUSIVE GROWTH EFFORTS Inclusive growth SPAN FROM is an imperative The process revealed four key THE PURELY for every pillars where Mastercard could COMMERCIAL CEO Partnership individual, from Refining have the greatest impact: TO THE FULLY for Economic farmers in the our inclusive 1. Moving individuals toward PHILANTHROPIC Inclusion greater financial security, developing world growth strategy building on our long-standing Mastercard joined the newly financial inclusion efforts, to ensure created CEO Partnership for to gig workers We pulled together a number that all people have access to the Economic Inclusion, which is of different efforts across the tools and resources they need to Driving impact in led by the UN Secretary- in global cities, organization to form Mastercard thrive in the digital economy. 2018 and beyond General’s Special Advocate as well as for Strategic Growth, which spans 2. Improving how communities for Inclusive Finance for from the purely commercial to drive economic development by We used our refined strategy to Development, Queen Máxima small and micro- the fully philanthropic, to further harnessing our technology and guide our ongoing investments in of the Netherlands. our commitment to pursue data science expertise to help inclusive growth. The pages that Through this collaboration, businesses commercially sustainable attract investments that can follow highlight our progress. 10 multinational companies social impact. have the most significant positive Looking ahead, we also see are partnering to expand and striving to grow To achieve the most impact, impact on communities, helping the urgency in mobilizing other accelerate financial inclusion and create jobs. we embarked on an initiative ensure that growth is inclusive. purpose-driven companies initiatives for underserved to refine our inclusive growth 3. Helping people navigate to achieve our shared vision. people in rapidly emerging strategy. The Mastercard Center today’s rapidly changing Through partnerships with economies. We are excited about Inclusive growth is equally for Inclusive Growth led the process, economy so that, as the nature others in business, we can the opportunities to advance important to communities, engaging leaders from government, of work changes, all people have apply our collective resources economic inclusion through this from towns working to attract nongovernmental organizations, access to tools that facilitate their and move at speed and scale partnership, which includes investment in distressed philanthropy, academia, civil society transition among places, positions to create additional pathways Mastercard’s work with Unilever. neighborhoods to villages and business to examine how such and careers. for inclusive growth. (Read more on page 31.) still in need of electricity. By issues as digitization, economic 4. Leveraging the power of data creating scalable solutions growth, income inequality, changing science for good by increasing for sustainable and inclusive demographics, urban migration and the capacity of social sector economic growth, we can build the changing nature of work create organizations and government pathways to a more secure challenges and opportunities for to solve systemic problems with future for all people. inclusive growth. data tools and insights.
22 MASTERCARD'S COMMITMENT 2018 TO INCLUSIVE GROWTH DRIVING IMPACT • Pledged $500 million for inclusive 2016–2017 growth BREAKTHROUGH LEADERSHIP • Established the Mastercard Impact • Led first public session on Fund 2014–2015 financial inclusion at Davos • Kicked off the CEO Partnership DEMONSTRATING COMMITMENT • Launched the Jaza Duka for Economic Inclusion with Queen Máxima of the Netherlands • Announced the Mastercard Lab for partnership with Unilever to help • Partnered with Accion to unlock Financial Inclusion with the support of micro-merchants growth for millions of small and the Bill and Melinda Gates Foundation • Piloted Mastercard Farmer micro-businesses • Announced goal to provide access by Network and Kionect 2011–2013 • Mastercard Lab for Financial 2020 to 500 million people previously • Built Mastercard’s Quick Response Inclusion launched Kupaa in Uganda EARLY AGENDA-SETTING excluded from financial services (QR) partnerships to bring the • Established Mastercard's Center technology to Africa • Created inaugural Data for Inclusive Growth Fellows program • Launched “Cost of Cash” studies • Co-chaired the World Economic Forum’s financial inclusion steering committee
23 Our inclusive growth initiatives
Mastercard Lab Our New Mastercard for Financial Inclusion Impact Fund Created in 2014 and located in Nairobi, the Lab seeks to create We created the Mastercard Impact Several institutions underpin groundbreaking solutions to help Fund to promote long-term inclusive our inclusive growth strategy individuals and micro-merchants economic growth around the world. and impact. benefit from the digital economy. Highlights of Fund grants Current projects include the committed to date include: Mastercard Center Mastercard Farmer Network (read DataKind: The Fund will support for Inclusive Growth more on page 30), Kupaa (more DataKind’s efforts to enhance the Established in 2013, the Center on page 29) and Kionect (more on use of data science and artificial leverages the company’s data, page 28), which facilitate digital intelligence by nonprofit organizations technology and expertise to catalyze payments and other solutions and governments for social impact. action on inclusive growth through that respectively support farmers, (This grant is part of the Mastercard research, programs, data philanthropy parents of schoolchildren and Center for Inclusive Growth’s new and engagement. To date, the Center small-scale merchants. With partnership with the Rockefeller has collaborated with more than 50 the support of the Bill and Foundation, which is described in research organizations and fellows and Melinda Gates Foundation to more detail on page 34.) invested in programs reaching more support these projects, the Lab Accion: The Fund will help Accion than 575,000 people in 17 countries. brings together Mastercard’s digitize and modernize financial The Center’s ongoing initiatives are innovation and global financial service providers serving small and focused on furthering the financial inclusion capabilities under one micro-businesses. This initiative is inclusion and security of individuals, roof, combining these with local intended to help up to 10 million connecting small and micro-businesses expertise and insight to empower people scale their businesses. with the tools and resources they the underserved. Business for Social Responsibility need to grow, equipping policymakers (BSR): The Fund will help BSR and community leaders with data- Mastercard Impact Fund expand financial inclusion and security driven insights to inform economic In part due to the benefits of U.S. for workers in garment supply chains, development, and accelerating the tax reform, Mastercard pledged especially women. BSR’s efforts use of data science in the nonprofit $500 million for inclusive growth include supporting the transition and public sectors. The Center has and established the Mastercard to digitized wages and advancing led the practice of responsible data Impact Fund. To date, the Fund, women’s economic empowerment philanthropy, working with partners which is administered by the in seven countries, starting with and scholars to develop insights Mastercard Center for Inclusive Bangladesh, Cambodia and Egypt. that support smart policy and NGO Growth, has committed more strategies to advance social impact. than $40 million in grants.
24 Mastercard Foundation Mastercard Created in 2006, at the time of Mastercard’s initial public Foundation offering, when the company highlights gifted 10 percent of its shares to pioneer an independent model for Key 2018 accomplishments include: To date, the Mastercard philanthropy. Its assets have grown • The launch of the Young Africa Foundation Scholars Program, to exceed $30 billion, making it one Works strategy to enable 30 an education- and leadership- of the world’s largest foundations. million young people, especially development program supporting In 2018, the Foundation received young women, to secure Africa’s next generation of $112 million in stock dividends dignified and fulfilling work leaders, has committed 35,000 from Mastercard to support by 2030. scholarships. The program enables its ongoing efforts. To date, • The opening of an office in Kigali, students whose talent and the Foundation has committed Rwanda, and the co-creation promise exceed their financial $2.2 billion to programs that are of two initiatives with the resources to complete their improving the lives of 33 million Rwandan government: Hanga education at universities in Africa, 1 people living in poverty. Today, Ahazaza (“create the future” in Europe, North and South America, it works in 29 African countries, Kinyarwanda), which will increase and the Middle East. The majority with 118 active partners. employment opportunities for of the scholars are young women. young people in the tourism and hospitality industry, and Leaders 1 Direct outreach is defined as the number in Teaching, which is to develop of beneficiaries directly reached through passionate, skilled teachers and the Mastercard Foundation’s program activities. The variety of methodology and prepare them to deliver high- measurement tools used to calculate direct quality secondary education. outreach reflects the different types of programming interventions undertaken by the Foundation. Its programming areas include education and learning, youth livelihood and financial inclusion, with direct outreach in each of these programming areas respectively totaling 124,000 people, 3 million people and 30 million people. Since the Foundation’s inception, an aggregate 33.1 million beneficiaries were directly reached. 25 Financial inclusion goals and performance
We are dedicated to increasing the opportunity for individuals Together with our partners, we have “Over the next decade, and small and micro-merchants reached more than 400 million people to achieve financial security and how can Mastercard greater prosperity. Since 2011, the previously excluded from financial number of adults excluded from the be an even greater financial system has dropped by services toward the goal of providing nearly a third, to 1.7 billion. access to 500 million by 2020. force for good than we are now? How can we play a role in rebuilding trust in corporations and other institutions? How can we put even more of the talent and treasure of this company to work in not only building profits, but building a better world?"
Ajay Banga, president and CEO, Mastercard
26 SOLUTIONS FOR INCLUSION “We are focused on When it comes to using our products, inclusion, there is a technology, expertise need for solutions and understanding of that bring together innovative technology, ecosystems to ensure business models and that the digital ecosystems. economy delivers on the goal of inclusive
We partner with growth.” customers, technology and telecommunications companies, governments and international Michael Froman, organizations to create solutions vice chairman and president of that advance financial inclusion— Strategic Growth, Mastercard helping consumers access basic financial services, helping merchants run their businesses more efficiently, helping small- enterprise owners gain access to credit and helping governments manage critical social services.
27 WE HELP CONSUMERS ACCESS BASIC FINANCIAL SERVICES AND MERCHANTS RUN THEIR BUSINESSES MORE EFFECTIVELY
In emerging markets, many micro-merchants — small- Kionect: scale traders with kiosks — rely on informal business systems, a technology typically buying wares from platform to help wholesalers with cash and receiving cash payments from micro-merchants customers. This reliance on cash limits their ability to grow and The Mastercard Lab for grow their build the credit history needed to Financial Inclusion created the businesses access formal financial products. supply chain platform Kionect This cash-based system to connect micro-merchants, Around the world, micro-, also makes it more challenging suppliers and financial institutions. small and medium-size to capture data of quality. Data Kionect offers financial institutions enterprises account for 90%2 on consumer demand and better data to extend credit to of all businesses, including purchases can improve decision- micro-merchants, who use that approximately 162 million making and efficiency, and can credit to buy more stock from businesses in emerging markets.3 help financial institutions create their suppliers, better serve These businesses are key drivers and tailor products and services their customers and grow their of economic growth, yet many that help micro-merchants grow businesses. We enhanced Kionect are stuck in the cash economy, their businesses. Data also allow to become a functional working- making it difficult for business consumer goods companies to offer capital credit platform to be owners to access credit and incentives and rewards targeted rolled out in several markets in grow their businesses. directly to micro-merchants. the coming years.
2 United Nations. Micro-, Small and Medium-sized Enterprises Day. 3 International Finance Corporation. (2017). MSME Finance Group: Assessment of the Shortfalls and Opportunities in Financing Micro, Small and Medium Enterprises in Emerging Markets. 28 Kupaa: digitizing school payments Wellness Pass: in Uganda using our technology to Leveraging Mastercard Lab for Financial The platform delivers benefits Inclusion launched Kupaa, a to parents, schools and the improve health our payment digital platform that helps government. Parents are able to outcomes technology to families in Uganda make receive Kupaa updates by SMS, school payments. Kupaa is while schools access the system We announced a global make access to implemented in partnership via an app. The platform also partnership with GAVI, the with the Ugandan Ministry of has a government dashboard Global Alliance on Vaccine clean energy and Education and Sports, UNICEF for a ministry of education to Innovation, to use our technology water affordable Uganda and Yo Uganda. track teacher attendance, see to digitize vaccination records Kupaa (which, in Swahili, means grants and view aggregated in developing countries in a safe We are partnering with “to fly high”) reduces inefficiencies student enrollment data to and secure manner. M-KOPA, initially in Uganda, to and increases the security of inform policymaking. This is part of a larger effort to provide affordable solar energy school payments by digitizing To date, Kupaa is available in digitalize the base of the pyramid, services, using a “pay-as-you- payments and information flow six school districts, reaching more creating an infrastructure and go” model and Mastercard’s between schools and parents than 400 schools with nearly ecosystem that can provide Quick Response (QR) payment and by enabling access to such 175,000 students; more than access to the digital economy and technology. education-related products 115,000 parents and guardians help governments, multilateral Our PayGo API solution as loans for school fees and have used the platform. organizations and NGOs more combines low-cost QR technology insurance. To register, students effectively deliver critical services — an open and interoperable and parents are given a unique to marginalized individuals technology — with the “internet of identifier that Kupaa uses to track and communities. things” (IoT), allowing customers payments and other student- to make secure, efficient related actions. payments from their mobile phones to access necessities like clean energy and water, while building a credit record. (Read more about how we’re applying this technology toward “pay-as- you-go” environmental solutions on page 72.)
29 Mastercard Mastercard Farmer Network: Farmer Network: who’s involved and how they benefit helping farmers leverage digital FARMERS GOVERNMENT tools Extends access to new markets Provides near-real-time visibility of and new buyers. Creates a digital transactions across the value chain, The Mastercard Lab for transaction history so farmers supporting the development and Financial Inclusion created the can access credit. Also supports implementation of effective policies. Mastercard Farmer Network Farmers Government transparent pricing, so farmers to provide smallholder farmers get more value for their crops. with a simple digital platform FINANCIAL INSTITUTIONS to gain access to agriculture markets and formal financial BUYERS Helps financial institutions make services, including payments better decisions about issuing Mastercard Reduces sourcing costs through credit via greater visibility of data. and financial histories. Not a direct sourcing platform. Helps only does this help smallholder Farmer Lowers transaction costs for the buyers build strong relationships with delivery of financial services. farmers and their families Network producers to better understand the fulfill their aspirations, the Buyers Financial availability of produce. Provides data Mastercard Farmer Network institutions VALUE-ADDED and analytics for buyers to better SERVICE PROVIDER facilitates greater efficiency in manage their businesses. the agriculture value chain. We launched Mastercard Provides an accessible platform to Farmer Network with the FARMER PRODUCER scale services through an installed International Center for Tropical ORGANIZATIONS (FPOs) customer base for selling products and services. Agriculture (CIAT) in Uganda, Increases FPOs’ services for the Government of Andhra members. Allows FPOs to help Pradesh in India and the National FPOs VAS providers farmers increase profits and helps Microfinance Bank (NMB) in build more sustainable FPOs. Tanzania. To date, more than 275,000 farmers have been registered on the Mastercard Farmer Network.
30 Digitizing payments for A key element of the program is equipping merchants with smallholder basic financial knowledge, farmers Jaza Duka: including the importance of using their credit responsibly. With this We announced our global The digital payment system financing for in mind, the Mastercard Center partnership with the Neumann reduces cash leakage, improves for Inclusive Growth partnered Kaffee Gruppe, one of the the transparency of payment small businesses with the nonprofit TechnoServe, world’s largest coffee trading flows and allows farmers to in Kenya which gives micro-merchants groups, to digitize payments earn up to 10% more for their in-person training on topics and enhance financial inclusion product. We also brought on a In Kenya in 2017, we began such as financial and credit and transparency in the local payment facilitator, Qiubo, a partnership with Unilever management, merchandising company’s supply chain. to offer micro-merchants a way and KCB Bank to provide low- and other business operational Together, we aim to position to accept digital payments and interest credit to shopkeepers skills. In 2017 and 2018, this coffee production as a main offer services such as cashback, and to digitize Unilever’s supply training reached nearly 5,000 driver of an inclusive economy, bill payments and mobile phone chain. Jaza Duka (“fill up your merchants, more than half of creating a source of long- top-ups in the places the coffee store” in Swahili), the program them women. As a result of term income for growers and growers live and work. prototype for our Kionect the program, shopkeepers who securing a sustainable supply As part of this partnership, development, helps KCB Bank were trained have reported an of coffee for the company. the Mastercard Center for assess credit risk and provide average increase in daily revenue Many farmers rely on cash Inclusive Growth is also shopkeepers with digital credit of nearly 20%. systems, which creates risks supporting the farmers with and accounts, which run on To expand the training of loss or theft and reduces financial-literacy training. With the Mastercard network. It program, we are using digital farmer access to better pricing, our support, Fundación Capital also helps Unilever expand training models, including SMS- as well as to financial products is giving farmers the financial its distribution. Since launch, based platforms. Mastercard and services that could help tools and education they more than 15,000 shopkeepers is committed to scaling the them weather tough times and need to use digital financial have registered to buy their program with other consumer build their businesses. products and develop new products through the program. goods companies across several We collaborated with behaviors that will help them emerging markets. This will give Neumann Kaffee Gruppe’s achieve financial security. Our shopkeepers a wider choice Mexican subsidiary, Exportadora goal is to replicate and scale among financial propositions, de Café California (ECC) on a the approach in other regions. training programs and other pilot program called Café Paga, benefits. which gave an initial pilot of 150 farmers in Chiapas access to a safe, secure account.
31 FINANCIAL LITERACY Education about the Mastercard Academy We also believe that financial products For more than 25 years, partnerships with key national Mastercard Academy has stakeholder groups afford us the and services and how educated 30,000 people Master Your Card opportunity to educate and align annually about the payments on policy issues of importance to use them is an industry and technology. Since Master Your Card to the various constituency important component With more than 600 courses, launched in 2011, Mastercard groups and customers we serve. the program strengthens the has collaborated with more For example, Mastercard is a of any inclusive growth understanding of topics such as than 120 community partners corporate partner of the National financial technology, digital across the United States Urban League, focusing on strategy. As a key payments, fraud, risk management around our shared goal: driving economic empowerment, equality, and regulation for industry understanding of electronic workforce development, criminal part of our financial professions and our stakeholders. payments and financial security justice and education. We work Courses are offered in local through access to educational collaboratively to address issues of inclusion efforts, we languages, and Academy programs. We are focused on importance to urban communities, develop, lead and attendees can choose from in- working with people of all ages, including the future of work, person or online courses, via our as well as new business owners, financial inclusion, stem education, sponsor financial Academy On The Web platform. to feel empowered to use and recruitment and retention. We also partner with local technology to make the most By the end of the 2018-19 literacy programs for universities and institutions to of their money. school year, we also reached enrich their curriculum and host Through the support of more than 30,000 students in consumers and small- technology conferences featuring our dedicated Mastercard more than 400 public schools trainings, hands-on technology employees, Master Your Card through our partnership with the business owners. demonstrations and networking. has participated in hundreds of leading U.S. education-technology events to deliver training and company, EVERFI Inc., providing capacity-building sessions in financial education to students at partnership with community no cost to schools or taxpayers. organizations, local governments Through the program, which is and other civic groups. In 2018, now in its third year, we have Master Your Card presented been able to teach students 17 financial literacy workshops about money management and and training sessions to more electronic payments, helping than 2,500 people in diverse set their foundation for a sound communities. financial future.
32 Girls4Tech Mastercard is helping to narrow the gender gap in science, GIRLS4TECH HAD technology, engineering and REACHED MORE math (STEM) education through our signature Girls4Tech THAN 400,000 GIRLS, program with a goal of reaching WITH A GOAL OF more than 1 million by 2025. As of the fifth anniversary of REACHING MORE Girls4Tech in April 2019, the program had reached more than THAN 1 MILLION 400,000 girls aged 8 to 12 in 25 BY 2025 countries, and it has engaged more than 3,500 employee mentors worldwide. The program has been translated To scale the program, we into 11 languages. have partnered with Scholastic, We built this fun, hands-on, Be Better China, Singapore inquiry-based curriculum around Committee for UN Women global science and math standards and the Network for Teaching to inspire young girls to pursue Entrepreneurship (NFTE). As part STEM careers. Developed by of our partnership with Major our leading technologists and League Baseball, we created curriculum experts, Girls4Tech Girls4Tech & Sports and hosted incorporates Mastercard’s deep two events in the District of expertise in payments technology Columbia prior to the MLB All- and innovation and gives girls a Star Game. We also expanded window into our work, focused the Girls4Tech program into Peru on encryption, fraud detection, and Scotland. We were pleased data analysis, network innovation that this program received and digital convergence. In 2018, external recognition: Girls4Tech Mastercard hosted more than 75 won the Global Citizen and Global events at which our employees Campaign of the Year from served as educators, role models PRWeek Global. and mentors.
33 DATA FOR GOOD We also help NGOs, nonprofits, city and regional planners, and others improve their capacity Mastercard is working to work with their own data- Data Science related resources. for Social Impact with leading scholars Our Data for Good program collaborative and institutions to initiated a number of activities. We launched our Data Fellows’ philanthropy conduct research program with our first six data fellows (read more on page 35), initiative and generate data- partnered with three academic institutions on research efforts, In January 2019, Mastercard driven insights that participated in Bloomberg’s and the Rockefeller Foundation Data4Good Exchange and announced a new collaborative guide evidence- supported the Stanford PACS philanthropy initiative, Data Digital Impact World Tour. Science for Social Impact, based solutions and dedicated to accelerating the use of data science by giving policymaking. nonprofit, civic and government organizations the tools, expertise and knowledge they need to help solve some of the world’s most Some of this work leverages pressing challenges. Mastercard data insights, some Through this collaborative, uses third-party data; in some cases, the Rockefeller Foundation and we provide capacity-building for an the Mastercard Impact Fund organization to extract insights from have made an initial five-year data. In all these cases, Mastercard commitment of $50 million, uses robust privacy and data- which we are hoping to grow protection controls. through participation from other companies and philanthropies.
34 Growth teamed up on a 36-hour These include how tax incentives The Mastercard “datathon” to gather insights stimulate growth and spending Center for about economic development in specific neighborhoods, how and financial inclusion in New tourism dollars are spent across Inclusive Growth’s Orleans. More than 60 volunteers neighborhoods and industries, from six offices spent more than and whether major events such new Data Fellows 1,000 hours analyzing anonymized as Mardi Gras and popular for social good Mastercard data, as well as tourist areas such as the French publicly available third-party data, Quarter support low-income Mastercard launched the Data to develop a holistic picture of neighborhoods. Fellows program, a collaboration New Orleans’ economic activity. Going forward, we will be that brought together six Thompson is using this working with our partners to highly regarded data scientists research to analyze a range determine how to build actionable from diverse academic and of economic issues and insights from these findings to government institutions to spend opportunities in New Orleans. benefit cities around the country. 12 months collaborating with Mastercard’s data scientists. Together, they are studying trends and developing insights to help policymakers implement new programs to improve the economic stability of the world’s vulnerable communities. For example, this program MASTERCARD’S DATA supported the research of Data SCIENTISTS STUDY TRENDS Fellow Michelle Thompson, an associate professor with the AND DEVELOP INSIGHTS University of New Orleans’ TO IMPROVE THE ECONOMIC Department of Planning and Urban Studies. Together with STABILITY OF THE WORLD’S Mastercard’s Data & Services team, the Center for Inclusive VULNERABLE COMMUNITIES
35 Crisis-response solutions COMMUNITY SUPPORT AND DEVELOPMENT We enable humanitarian organizations to more efficiently and effectively serve populations We are committed affected by conflict, displacement Disaster relief or natural disaster. Through to building solutions products such as the Mastercard We take a holistic approach Aid Network and initiatives like the to disaster relief by providing that channel aid Smart Communities Coalition, we corporate and employee are deploying technology and new donations for relief agencies. We quickly and securely partnership models to ensure more also use our products, services, comprehensive responses. insights and employee volunteer to those who need Since 2015, the Mastercard Aid support to help relief efforts. it. We also support Network and our prepaid and debit We committed $720,000 to cards have helped provide lifesaving support disaster response efforts communities via assistance — including essential goods following hurricanes Michael such as food, blankets, tarps and and Florence and the California charitable giving schoolbooks — to well over 3 million wildfires in the U.S.; earthquakes people in Greece, Jordan, Kenya, in Lombok and Sulawesi, to organizations Lebanon, Mozambique, Nepal, Niger, Indonesia; and Typhoon Yutu in Nigeria, the Philippines, Serbia, Syria the Northern Mariana Islands. working at the and Yemen. We also worked with the frontlines to help We established the Smart American Red Cross to provide Communities Coalition, a public- efficient aid distribution for people rebuild their private effort co-chaired by victims of North Carolina’s Mastercard and USAID Power devastating hurricane and lives during and Africa to improve energy access and flooding. As part of our support, connectivity and to increase the we sent a team of employees after times of crisis. availability of digital tools in refugee to assist the Red Cross with its settlements and host communities. on-the-ground disaster relief, The coalition comprises more than including disaster assessment 35 organizations that facilitate and inventory allocation. innovative, sustainable approaches to delivering essential basic services. Our goal is to inspire hope and economic opportunity for refugees and the communities that host them.
36 Funding for Stand Up critical causes to Cancer We fund critical causes and Together with consumers, community programs through Mastercard has donated more Mastercard’s Priceless Causes than $45 million since 2010 to campaigns. Through these help Stand Up to Cancer (SU2C) campaigns, we work in fund lifesaving cancer research. partnership with issuers and Mastercard has made donations merchants to make a donation on behalf of consumers and has to a designated cause every run promotions during which time consumers use Mastercard we match donations consumers products for a certain purchase. 100 million made through their Mastercards In addition to these donations, meals challenge to SU2C. we also enable consumers to raise Through the partnership, we funds for meaningful causes by We contributed 33 million meals engage our issuer and merchant leveraging our payment expertise. as part of our commitment partners to promote the program Our Donation Platform, currently to provide 100 million meals through various media channels. available in 10 countries, allows in total during a two-year We also provide our employees consumers to sign up to add a challenge with the UN World access to valuable resources from small donation to their purchases. Food Programme and local the SU2C medical community, nonprofit organizations. We including information on how funded those meals through to receive the latest and most 84 activities and campaigns promising cancer treatments in collaboration with our through clinical trials. customers to combat extreme hunger and poverty. This program fed an estimated 200,000 children (13 children for every Mastercard employee) for an entire school year.4
4 Calculation based on global average cost of a school meal by WFP ($0.25), the average number of school meals received by a child in one year (170), and the number of Mastercard employees in 2018. 37 INSPIRED 03WORKFORCE
38 OUR APPROACH Mastercard relies on our global workforce to help us achieve our goal of building a sustainable, inclusive global economy. We leverage our core values of trust, partnership, agility and empowered initiative-taking to make our company the place where the best people choose to be.
39 IN ORDER TO ACHIEVE OUR AMBITIOUS SUSTAINABILITY GOALS, WE WILL NEED TO ATTRACT AND RETAIN THE WORLD’S TOP TALENT "You need to harness the collective
Our approach to our people uniqueness of those enables us to implement our long- term business strategy, through around you to widen which we encourage employees to upgrade current and future your field of vision — skills, offer competitive rewards to see things and benefits, and secure our future through leadership while differently, to fail continuously evolving our culture and values. harder, to innovate and In order to achieve our ambitious sustainability goals, we to question everything. will need to attract and retain the world’s top talent. We achieve Widening that field of this by offering our employees fulfilling career opportunities to vision means widening be a part of purpose-driven work your worldview." that benefits our customers, our stakeholders and our communities on a global scale. We support our Ajay Banga, diverse global workforce of 14,800 president and CEO, Mastercard employees through an inclusive employee-experience strategy that encourages them to bring their whole selves to work each day.
40 Awards Mastercard was honored to receive the following awards in recognition of our workforce inclusion and diversity efforts:
Bloomberg 100% on Disability: Disability Gender Equality Index Equality Index (DEI) Best Places to Work for Equal Opportunity Disability Inclusion Publications Reader’s Choice Top 50 Employers for Equal DiversityInc Opportunity Top 50 Companies for Diversity Women’s Choice Award Best Companies 100% on Human Rights for Millennials Campaign’s Corporate Equality Index Forbes Best Places to Work for LGBT America’s Best Employers Equality for Diversity Fatherly Working Mother and AVTAR 50 Best Places to Work for Best Companies for Women New Dads in India Great Place to Work: Professional Woman’s Best Workplaces in Magazine Singapore, Top 50 Employer “Best of the Best” Employers in Canada, Best Workplaces for Diversity in Technology (Canada), Best Companies to Work for in Greater China
41 GLOBAL INCLUSION AND DIVERSITY The successes Mastercard To help solidify the importance has achieved in the world are of Global Inclusion and Diversity Global made possible by the diverse as a business imperative, Inclusion Council For Mastercard, experiences, insights and Mastercard launched Regional perspectives of our workforce. Action Plans across our five We strive to make measurable inclusion and diversity At the core of our strategy is regions — North America, Europe, differences every day, and our mean more than recognizing and strengthening Middle East and Africa, Latin Global Inclusion Council (GIC) our diversity. Inclusion is a America and the Caribbean, reflects this. The board of directors bringing together leadership skill that allows and Asia Pacific. Our Chief for our Global Inclusion Office Mastercard to leverage its Inclusion Officer met with This year, we are taking helps guide our collective vision people from different diverse workforce to deliver our country presidents and senior our efforts a step further. to ensure we use our actions to innovative products and services. leaders to identify their regional Our new video, “What We’re cultivate a culture of inclusion backgrounds. Our emphasis on inclusion priorities and develop plans to Made Of,” was developed to and belonging throughout helps us understand and serve achieve them. Ideas of inclusion express our belief that we can Mastercard. Our GIC brings a an increasingly diverse pool of and balance in gender and cultivate a culture of belonging global perspective, with members customers and communities. ethnic representation appeared by creating connections representing all of our business Surrounding ourselves with as high priorities across all that inspire acceptance — of regions — North America, Latin It is a belief that our differences talented people from many of our regions; other regions ourselves and of each other. America/Caribbean, Europe, empower us to be a better team — different backgrounds is how we also emphasized building local The influence of diversity, Asia/Pacific, and Middle East one that makes smarter decisions, limit potential blind spots and leadership skills, ensuring mobility inclusion and belonging leads and Africa. drives innovation and delivers maintain our ability to prepare of talent across the region and to a winning culture with stronger business results. for future opportunities and more. Developing these regional decency at its core. It’s our Everywhere we work, we seek challenges. Our employees, priorities will continue to reinforce standard at Mastercard, to create meaningful connections, suppliers, customers and our reputation as a great place to because it sparks passion and THE INFLUENCE inspire acceptance and cultivate a stakeholders expect Mastercard work. We also focused on closing pride to do our best work. community where we all belong, to reflect the diversity of our the gender gap and increasing OF DIVERSITY, regardless of — and because of — global presence and experience. the female representation within INCLUSION AND our differences in age, gender, We challenge ourselves to our acquired companies, including ethnicity, experiences, abilities provide a workplace where the through outreach at Women in BELONGING and perspectives. best individuals can thrive and Tech events and empowering LEADS TO A apply their authentic selves to their women leaders. help our company succeed. CULTURE WITH DECENCY AT ITS CORE
42 Our commitments to a culture of inclusion “Building diverse and belonging teams is just one part As we continue our journey of of the equation; we inclusion, Mastercard remains focused on taking actions that also have to create make an impact. Among our efforts:
an inclusive culture We are committed to gender equity and the principle of equal where employees, in pay for equal work. all their diversity, feel We are dedicated to recruiting and valued and respected. developing female leaders, and we have increased the representation Inclusion is a leadership of women in our workforce and in skill that has to be leadership positions. developed. When we We offer our employees compensation and benefits do it right, it’s better to support their entire experience, both personally for business and our and professionally. communities.” We work to provide a safe and healthy workplace that enables Randall Tucker, employees to achieve their chief inclusion officer, Mastercard full potential.
43 We strive to attract and retain top talent while simultaneously ensuring rich GENDER OUR BOARD diversity at all ETHNIC BACKGROUND ETHNIC BACKGROUND levels of the U.S. WORKFORCE (ALL LEVELS) U.S. SENIOR MANAGEMENT 39% 27% organization. Black or Black or African American 5.6% African American 6.2% We provide management with information on the gender and ethnic Female global Women Hispanic or Hispanic or workforce diversity of their organizations so Latino Latino that they can build inclusive teams 8.4% 10.9% and support our talent pipeline around the world. Asian 19.9% Asian 14.4% 29% 53%
All other All other people of color 1.7% people of color 1.2% Female senior From diverse management backgrounds White 64.4% White 67.3%
44 Each year, Mastercard of Women in Computing, Yale’s partners with leading business Black Solidarity Conference, organizations, universities and Harvard Business School’s events to seek out exceptional Africa Business Conference, recruits and encourage them the Corporate Counsel Women to join the team. We continued of Color Career Strategies our support of INROADS, an Conference and many others. international nonprofit that works We also recruit through career to increase the representation fairs that focus on students and RECRUITING AND of people of color in corporate recent graduates from diverse RETAINING A DIVERSE leadership, and the Posse backgrounds. We continued Foundation, which identifies to recruit at historically black WORKFORCE extraordinary public high school colleges and universities, including students who may be overlooked Jackson State University, Howard by traditional college selection University, Hampton University Guided by our processes. Our support of these and Delaware State University. programs strengthens the In addition to employee Chief Inclusion talent pipeline for Mastercard recruitment, Mastercard Officer, Mastercard and provides students with maintains a broad portfolio of opportunities to develop their partnerships and organization continued to work personal and career-oriented sponsorships that allow us goals. This year, Mastercard also to strengthen our connection to strengthen our committed to students from with diverse communities. these partnerships joining the We sponsor approximately 45 inclusive culture. summer internship program in organizations that represent our St. Louis and Purchase, diverse communities, including New York, offices. African Americans, people with We built up our existing programs Among the many conferences disabilities, Hispanic and Latino and developed new efforts to find, we supported, Mastercard was groups, LGBTQ organizations, recruit, develop and retain the honored to have a presence at veterans and women. best and brightest talent. the Grace Hopper Celebration
WE HAVE DEVELOPED NEW EFFORTS TO FIND, RECRUIT AND RETAIN THE BEST AND BRIGHTEST TALENT
45 Diversity sponsorships
Mastercard has leveraged a number of partnerships to build our inclusive culture. Here are some of the organizations we sponsor.
AFRICAN AMERICAN LGBTQ ALL COMMUNITIES Management Leadership Human Rights Campaign The Conference Board for Tomorrow Lambda Legal Gartner (formerly National Action Network OUT Leadership Corporate Executive Board) National Museum of Stonewall UK African American History Professional Diversity and Culture World Pride Network
National Urban League VETERANS The Council of Urban Professionals DISABILITY American Corporate Partners DiversityInc Best Buddies The Wounded Warrior Launch Code Disability:IN Project The National Association of Minority and Women HISPANIC WOMEN Owned Law Firms New York Hispanic 30% Club Chamber of Commerce Corporate Counsel Puerto Rican Legal Women of Color Defense Fund Financial Alliance for Women UN HeforShe Women in the World
46 A workplace free of discrimination and harassment All Mastercard employees We do not tolerate unlawful deserve to be treated fairly, discrimination, harassment Business with respect and dignity, and or retaliation by employees or Resource Groups we are committed to supporting by our vendors, contractors or a diverse and inclusive workforce business partners, including Mastercard’s nine employee ADAPTability around the globe, free of sexual harassment, degrading affinity groups — our Business Employees with disabilities and discrimination, harassment or offensive comments or jokes, Resource Groups, or BRGs — their friends and families and retaliation. violence, intimidation or threats. help to advance employees’ As an equal employment All Mastercard employees receive professional development and EAST opportunity workplace, we training on these policies and on leadership skills while deepening Exploring Asian Societies believe that job qualifications and our expectations. We enforce their connection to the and Trends performance should be the sole them by providing employees company’s work. ePros basis for employment decisions with several avenues to report In addition, these BRGs act Experienced Professionals and opportunities. Every day, we concerns, including an anonymous as internal business consultants, work to create a culture that is Ethics Helpline. We also have helping the company with Latin Network built on decency and that is open, an Employee Relations function consumer research, cultural Employees of Latin descent diverse and inclusive. We recruit, that promptly investigates all insights, customer segmentation LEAD hire, train, pay and promote complaints received and takes and access to networks. While Leading Employees qualified individuals, regardless appropriate responsive action each BRG focuses on specific of African Descent of factors that include: when warranted, in line with areas, they are all guided by our PRIDE consistently applied principles culture of inclusion and are open • age Fostering an environment of of accountability and discipline. to all employees. Across our global • alienage or citizenship status inclusiveness and respect for operations, we have over 100 BRG • color, ethnicity, creed or race LGBTQ employees chapters in 35 locations, with more • disability than half of our global workforce SALUTE • gender, gender identity or QUALIFICATIONS participating in these groups. Active and veteran military gender expression AND PERFORMANCE personnel and their families • genetic information WLN • marital or family status SHOULD BE THE Women’s Leadership Network (including pregnancy, childbirth or breastfeeding) SOLE BASIS FOR YoPros • national origin EMPLOYMENT Young Professionals • religion DECISIONS AND • sexual orientation • veteran status OPPORTUNITIES
47 Recruiting women and Pay equity supporting their Equality is one of the foundations career growth of our commitment to building an inclusive, high-performing One key focus area for culture at Mastercard. As we improving our gender mix advance our efforts, we continue is recruiting from diverse to embrace practices designed candidate slates for all open Gender to ensure our workforce receives positions. Every year, Mastercard equality equal pay for equal work. partners with leading business To support this commitment, organizations, universities and Increasing female gender each year we examine our pay events to seek out exceptional representation is a critical practices with the support of recruits and encourage them to aspect of Mastercard’s diversity third-party analysis. We review join Mastercard. and inclusion agenda. Today, and benchmark every role in We have formal, targeted women represent 39% of our our organization to comparable discussions to address any global workforce and 29% of positions in the external market, development and succession- our senior leadership. and we assess compensation planning gaps by gender at our decisions for potential pay senior management levels. We disparities by gender, among work to ensure we remove any WE EMBRACE other categories. If we uncover barriers that disproportionally disparities that are not explained disadvantage any employee PRACTICES in an acceptable manner, we take segment, including women, DESIGNED TO appropriate responsive action to and afford them the same correct the situation. Furthermore, opportunities for career ENSURE OUR we offer employees multiple advancement. channels to raise pay-disparity We also introduced a global WORKFORCE concerns, including our Ethics female leadership development RECEIVES Helpline, our Employee Relations experience called Women Who team and the Law Department. Lead, which focuses on amplifying EQUAL PAY FOR In 2018, our assessment and the voices and perspectives of EQUAL WORK validation process found that, the next generation of talented globally, women at Mastercard women to ensure that they have earn $0.996 to every $1.000 the necessary exposure and earned by men, continuing our confidence to take on broader progress toward full pay equality. roles within the organization.
48 We developed our Relaunch RYC participants — Our work on these initiatives Your Career (RYC) program to “Relaunchers” — engage in a paid, in recent years has helped help mid-career employees 16-week program that offers Mastercard shape our new, returning to the workforce after a training and experience to help comprehensive women’s career break navigate recruitment smooth their path back into the empowerment strategy, which and hiring challenges. By attracting workforce. RYC participants are will launch in 2020. Through mid-level and senior-career paired with a hiring manager that this strategy, our Executive Vice applicants to Mastercard, RYC provides coaching and regular Chairman and Chief Inclusion allows us to tap into and benefit feedback, as well as a mentor Officer are leading a company- from the wealth of experience to assist with networking and wide effort to guide our work to and talent they bring. Candidates navigating the workplace. achieve a world beyond gender eligible for RYC have taken a career At the end of the program, inequality and exclusion by break of two or more years and we offer high-performing RYC focusing on three strategic pillars– are prepared to return to work candidates the opportunity to people, market and society: full-time and re-establish their take on permanent roles. careers. Because of the prevalence We continue to grow the People: Strive for gender balance of women in caregiving roles who RYC program: In our 2017 pilot throughout the company and take such a career pause, we look year for RYC, we hosted eight become the “Employer of Choice” to this program to bolster our Relaunchers in two countries. for talented women around efforts toward gender balance In 2018, 31 Relaunchers in nine the world. in the workplace. countries participated; at the end of that round, 48% of participants Market: Understand the needs advanced to full-time positions of women, who make 80% of at Mastercard. household buying decisions. Design We are also at work growing a products and services that meet diverse pipeline of future leaders. their needs, and become the WE CONTINUE Through our Women in Tech “Brand of Choice” for women. initiative, Mastercard empowers TO GROW OUR girls and women entering STEM Society: Invest in inclusive growth RELAUNCH fields, identifying promising for all the communities we candidates in these career tracks serve and become the “Partner YOUR CAREER and recruiting them to join the of Choice” for economically PROGRAM TO Mastercard workforce. We’re also empowering women around a proud supporter of Launchcode’s the globe and building a more HELP MID-CAREER CoderGirl program, a weekly inclusive society. EMPLOYEES meet-up that offers aspiring female coders mentoring from RETURNING TO seasoned professionals. THE WORKFORCE
49 Compensation and rewards ATTRACTING AND ENGAGING TOP TALENT We have designed our Total Rewards programs to enrich our employees’ experience at In order to remain work and beyond, through a mix of fixed and variable pay the place where the that includes a base salary, best people choose annual cash incentives and long- term stock incentives. These to work, Mastercard compensation packages are guided by three core principles: Employee offers a competitive benefits 1 Align our long-term interests benefits-and- with our stockholders’ interests. Mastercard has always been 2 Ensure market-competitive pay an active and generous rewards program across our packages. contributor to our employees’ to attract and 3 Design pay packages that benefits, including a focus on encourage optimal short- the retirement readiness of retain the most and long-term performance. our employees. We expanded our employer contribution to talented employees Mastercard’s executive defined contribution retirement compensation program is plans and introduced a minimum around the world designed to support our strategic global standard contribution of objectives to grow, diversify 10% of an employee’s salary and provide the and build our business and to across all of our markets. opportunity to bring attract, motivate and retain our Introducing this standard will executives, who are critical to the increase retirement benefits for their authentic company’s long-term success. 80% of our employees, including (See our 2019 Proxy Statement those in the U.S. selves to their work. for more details.) In 2018, we estimate that our CEO’s annual compensation ratio to the median annual total compensation for all employees was 167-to-1.
50 Employee and leadership development programs Graduate recruiting At Mastercard, we place great Our Career Launchpad emphasis on living our core program offers every employee a Listening to One way in which we have This year, the company principle of decency. We provide personalized career-development successfully recruited great expanded the program with a a number of training procedures experience, including creating a employee new technologists to join threefold increase in college hiring to ensure that every employee career plan and detailing the skills, feedback our dynamic business is across the globe, and also by feels valued and respected, with resources and relationships that through our Management establishing a robust University decency at the core, including: will help them achieve their goals. Just as we strive to recognize Graduate Development and Relations Strategy to attract top- • Respect in the Workplace In 2018, nearly 11,300 employees the good work our employees MBA Management Associate notch students to compelling jobs • People with Disabilities engaged in our formal learning do every day, we want them to programs. at Mastercard. We have identified • Annual Code of Conduct tools for a total of more than be empowered to tell us what The full-time hires that joined more than 100 schools across the 160,000 hours of training. Mastercard is doing well — and the company through these globe, 67% of them outside the • Videos on Decency Last year, we continued our where we could be doing better. programs represent diverse, U.S., with which to build intensive, We believe that creating the employee-recognition program, Our annual employee- high-performing talent in areas multiyear partnerships, creating right experience for our employees Recognizing You, which rewards experience survey provides an of strategic importance to mutually beneficial engagements empowers them to perform at behavior that drives business opportunity to reflect on our Mastercard. They welcome the to share our industry expertise their best. Our ongoing coaching results. We designed the program progress as a company. In 2018, opportunity to work internationally with the world, accelerate the and feedback processes support to encourage all employees to 86% of our employees completed and alongside senior leadership sharing of knowledge with the their career development celebrate the big and small wins the survey, and 91% agreed with as a way of expanding their world’s best universities and and growth, including annual every day, express gratitude for the the statement, “I am proud to experiences and accelerating make Mastercard a top-of-mind performance and development great work we do and recognize work for Mastercard.” Even so, their career progression. employer for the best students. reviews for 95% of our employees the efforts required to accomplish our workforce highlighted a need in 2018. Additionally, formal and our goals. Over the course of the to speed deployment of resources self-guided training and company- year, employees offered more and to give feedback. In response, wide recognition opportunities help than 26,000 recognition moments our Chief People Officer worked all employees feel valued in their across Mastercard in more than with the management committee OUR ONGOING contributions to the company. 60 countries. to address opportunities for As our employees seek to learn Recognizing You allows us to improvement on a global basis, COACHING new skills or move to new roles, we harness the power of recognition including a continued focus on AND FEEDBACK offer a great breadth and depth and empower expressions of thanks optimizing our operating model of online, no-cost, self-paced among all employees. Simple and developing new tools to PROCESSES learning opportunities, as well as expressions of appreciation and provide more frequent coaching SUPPORT CAREER a tuition assistance/reimbursement recognition inspire us personally, for employees while obtaining program to support our employees’ create meaningful connections feedback from them. DEVELOPMENT continuous learning. between us and transform our AND GROWTH culture as a whole.
51 Because our employees’ needs and regional requirements vary around the world, we have EMPLOYEE HEALTH developed a core set of benefits AND WELL-BEING we offer to all employees globally, upon which we tailor Our parental leave policy and customize benefits to meet supports all of our colleagues in Driven by our local and regional needs. all geographies — regardless of Among the core benefits we race, gender, sexual orientation philosophy to care offer are health-care coverage and or local laws — for adoption and life insurance and retirement plans, childbirth. This is consistent with for our workforce, as well as disability insurance and who we are and our support of accident benefits to help them marriage equality. We also Mastercard has weather life’s misfortunes. provide back-up child- and elder- We strengthened our global care options in several countries, created The Whole well-being offerings to help as well as a bereavement-leave You, comprehensive all employees to perform at program globally. their best, personally and As part of our wellness focus benefits packages professionally, within our three at our U.S. operations, we offer focus areas: physical, emotional employees workplace ergonomic designed to promote and financial well-being. In the assessments and on-site fitness coming months, we will create centers in our Purchase and good health and a personalized experience that St. Louis locations. In addition, inspires daily engagement with Mastercard has partnered with financial stability for well-being programs, activities Rally Health, a digital health our employees and and events, allowing employees to platform that makes it easy for set and track personally important employees to incorporate exercise their families. goals and achieve sustainable and wellness activities into their behavior that improves their daily routine. Our U.S. workforce overall well-being. and covered spouses/partners are eligible to earn up to $850 each year in their Health Savings Accounts by engaging with Rally to maintain and track their wellness activities, such as visiting a doctor for their annual physical exams.
52 Mastercard employs a HIPAA Workspace safety Privacy and Security Officer responsible for determining and security compliance with the U.S. Department of Health and Mastercard is committed to In addition to making use of Human Services regulations, protecting the security of our the latest security technologies and we protect all personal company, brand, employees, for our workplaces, we’ve health information with physical, facilities and information with developed an e-learning platform technical and administrative technology, personnel and physical to promote security awareness safeguards. In addition, personnel and logical controls to provide a and communicate our security authorized to access employees’ safe working environment. policies to our workforce, as well health data receive detailed Our Corporate Security as virtual-reality safety training. training about HIPAA to ensure department provides Mastercard also offers enterprise- ethical use. comprehensive coverage, wide classroom training on first We are leveraging our offices monitoring, awareness and aid, CPR, automatic external as tools to improve and maintain intelligence, advising on defibrillator (AED) use and our workforce’s well-being. Our risk-mitigation and threat women’s self-defense. Worldwide Design standards preparedness. Whether during guide us to locate workstations corporate events, employee where they receive optimal natural travel or daily operations at light, and we encourage active our workplaces, the Corporate use of our facilities by centrally Security team is proactively locating pantries, recycling protecting Mastercard and facilities and common areas. We its employees. encourage our employees to rest and recharge with in-office quiet rooms, meditation rooms, wellness rooms and game rooms. Our larger facilities also include fitness WE STRENGTHENED OUR centers and walking trails to GLOBAL WELL-BEING facilitate movement throughout the day. OFFERINGS TO HELP ALL EMPLOYEES TO PERFORM AT THEIR BEST
53 Mastercard’s donation- matching program doubles the impact of our employees’ financial support for qualifying organizations. We also encourage EMPLOYEE every full-time employee to spend VOLUNTEERISM as many as five workdays per AND PHILANTHROPY year engaging in volunteering and community activities. Every employee who volunteers at least Our purpose of 40 hours per year to a single organization is eligible to apply for doing well by doing up to four $500 grants annually good is most visible to help further that group’s work. As of its fifth anniversary in April 2019, Girls4Tech has in the dedication Below are some of the many engaged more than 3,500 worthy organizations our employee mentors to reach more Mastercard employees support: than 400,000 girls in 25 countries; it has been recognized by the employees show Jefferson Foundation, PRWeek Girls4Tech Global Campaign of the Year and in volunteering Our award-winning Girls4Tech™ Global Citizen, and PR Daily for for causes they education program aims to best Global CSR Initiative and create future problem-solvers Community Affairs. We continue care about. and is designed for girls around to expand the global reach of the world aged 8–15. Based on the program by translating the STEM principles, Girls4Tech was curriculum into 11 languages developed in conjunction with our and creating partnerships with top engineers and technologists to Scholastic, Be Better China, Every day, our people commit showcase Mastercard’s payments Singapore Committee for UN time, energy and passion to technology, incorporating our deep Women, Network for Teaching support local projects and expertise in encryption, fraud Entrepreneurship and Major address global challenges, detection, data analysis, big data, League Baseball to advance and our company encourages digital convergence and more. STEM education. them in the enduring effect they have on their communities.
54 Teaching tomorrow’s business leaders Over the past 13 years, more than 5,000 employees in the St. Louis and New York areas have Employees volunteered in local schools with Junior Achievement programs, teaching more than 80,000 Mastercard provides a $2,250,000 K–8 students. Mastercard talent as a force for good number of opportunities Retirees Supporting future Mastercard and the World Food for employees to Military mentoring entrepreneurs Programme (WFP) have been support communities $288,000 For the past four years, we’ve Mastercard has partnered partners since 2012, focusing and charities through served as a sponsor of American with the Network for Teaching on the transformational power Corporate Partners (ACP), with Entrepreneurship (NFTE) since of school meals, which can help our employee giving Volunteer Incentive Program 178 employees in the U.S. and 2010, working to inspire students improve children’s health, cognitive program. U.K. serving as yearlong mentors in underserved areas to envision, development, access to education $150,000 to more than 350 members of develop and launch their own and future lifetime earnings. The the military, supporting them as businesses in the U.S., Mexico and partnership includes multiple More than 3,000 Political Action they re-enter civilian life. As of China. We’ve supported NFTE elements, such as cause marketing, employees supported Committee (PAC) Match* December 2018, there were 43 through our volunteering efforts, as consumer fundraising, grants, active Mastercard mentorships, well as several board memberships support for emergencies, expertise more than 2,200 and since 2015, 99 veterans have for our employees. In addition, and employee engagement. charities through $197,000 obtained employment during their we’ve donated nearly $8 million In partnership with WFP, monetary donations Mastercard mentorships. to support its global mission. we provide opportunities each or by contributing Mastercard matching In 2018, we conducted a survey year for our employees to give contributions of participants and learned that back, using their knowledge and nearly 70,000 volunteer 100% are glad that Mastercard is skills. Employees conduct cost- hours to support these $2,972,000 participating, would recommend benefit analyses that help local charities. ACP to a colleague and would governments around the world participate again. In addition, better understand the long-term the majority of veterans said benefits that school meals provide they had improved their resume for children and their economies. and interview skills, with half Twelve Mastercard employees translating their military service from 10 countries went on four- to corporate America. week missions to complete these analyses in Laos, Benin, Malawi, *Employee PAC contributions that Mastercard Uganda, Indonesia and Ghana. is not allowed to match are allotted alternative dollars to donate to approved charities.
55 ENVIRONMENTAL 04STEWARDSHIP
56 OUR APPROACH Global companies have both an opportunity and a responsibility to contribute solutions for the world’s environmental challenges, including climate change.
57 OUR FIRST PRIORITY IS Our environmental goals ENSURING WE MANAGE AND CONTINUOUSLY IMPROVE THE ENVIRONMENTAL FOOTPRINT OF OUR OWN OFFICES AND
OPERATIONS CLIMATE Reduce absolute Scope 1, Scope 2 and Scope 3 greenhouse gas (GHG) At Mastercard, we have set Development Initiative to reduce emissions 20% by 2025, from a 2016 ambitious goals and are taking our biggest carbon impacts, baseline. action across our company and Scope 3 emissions in our supply supply chain to support the chain. We also continue to Paris Agreement target to limit develop environmentally conscious global warming to well below solutions to help the world reach 2 degrees Celsius. a sustainable future. In addition to addressing our We take pride in our climate impacts, we are working environmental leadership, which ENERGY to improve Mastercard’s overall goes hand-in-hand with our environmental performance by vision for inclusive growth. Too reducing our waste and natural often, the people excluded from resource impacts and designing economic opportunity are those 100% solutions for a sustainable future. who shoulder the burden of the Continue to source 100% Our approach has not changed. world’s environmental challenges, renewable energy. Our first priority is continuously especially climate change. By improving the environmental using all our resources as a global footprint of our offices and company, we can be a force for operations. The next step is good in building an inclusive, ensuring our electronic payment environmentally sustainable world. solutions are built on a sustainable foundation by increasing the WASTE energy efficiency of our network and data centers and by investing in renewable resources. We also 80% look to our supplier base. In 2018, In 2019, recycle, divert or compost we launched our Environmental 80% of the waste generated in facilities we own.
58 Our environmental performance highlights
ENERGY EFFICIENCY ENVIRONMENTALLY CLIMATE AND GREEN BUILDINGS CONSCIOUS SOLUTIONS • By the end of 2018, we had • We joined Green Lease Leaders • We launched the Greener reduced our Scope 1, Scope 2 and began incorporating green Payments Partnership with and Scope 3 emissions 42% from leasing language into requests card manufacturers Gemalto, our base year (2016), and we are for proposals and leases to help Giesecke+Devrient and IDEMIA continuing to reduce emissions tenants and landlords make to create environmentally toward our 2025 target. sustainable decisions. friendlier card solutions. • Mastercard became the first • We certified eight new buildings • We expanded applications payments company to set an as green, bringing our total up of our PayGo technology to approved science-based target; from 74% in 2017. increase access to affordable external review helps ensure that • 79% of our owned and operated clean energy and water. we can help the world meet the facilities’ total square footage • We led new approaches to Paris Agreement goals. is either green-building certified urban sustainability challenges, • We were recognized for our or located in a building that such as joining the Steering goal-setting at the 2019 Climate achieved green certification in Committee of the UN Global Leadership Awards by the Center that area of the world. Compact Cities Programme and for Climate and Energy Solutions • Our Vietnam office became the pioneering City Possible, which (C2ES) and the Climate Registry. first in the country to achieve harnesses the public sector’s LOTUS GOLD for Small Interiors. power to address the world’s most pressing urban issues.
WASTE • 77% of waste in our owned facilities was recycled, diverted or composted. This exceeded our goal of 70%.
59 ENSURING OUR SUSTAINABILITY
Making our payment Our primary teams responsible for improving our environmental solutions environmentally performance and that of our supply chain are our global sustainable means Real Estate and Sourcing and Supplier Management, which minimizing Mastercard’s regularly report results to our Chief Financial Officer. Our contributions to climate Board of Directors’ Nominating change and limiting our and Corporate Governance Committee oversees all of our natural resource use and environmental initiatives, including investments in environmentally waste output. beneficial products and services.
These efficiencies benefit our business and help us reduce our overall environmental impact. We are also working with suppliers to improve their environmental performance.
60 Doing our The next step is managing We value transparency, and emissions, and we have set we have participated in CDP’s part on climate an ongoing goal to source Climate Change survey since 2010 100% renewable energy, even and in its Supply Chain survey with science- as Mastercard grows. We are since 2013. We have quantified based goals implementing a long-term the emissions of our supply chain strategy to procure more so we can identify opportunities We are one of about 600 renewable energy through for the greatest reductions. leading companies to align our on-site installations and, In 2019, CDP recognized climate goals with the Paris where practical, to reduce our Mastercard as a leader with an Agreement’s commitment dependence on renewable “A” Supplier Engagement Rating. to limit global warming to energy credits. We also cut We are also closely following the well below 2 degrees Celsius. our emissions through energy development of standardized We announced an emissions- efficiency, green building and climate disclosures, including the reduction goal that was better transportation solutions. recommendations of the Task independently assessed Additionally, we collaborate with Force on Climate-related Financial and approved by the Science our suppliers to reduce their Disclosures (TCFD). Based Targets initiative. In emissions. In recognition of this undertaking a rigorous process work, Mastercard received a to specify how much and how 2019 Climate Leadership Award quickly we will reduce our GHG from the Center for Climate and emissions, we became the first Energy Solutions (C2ES) and the payments company to set a Climate Registry. science-based goal. We are working hard to reduce our absolute Scope 1, Scope 2 and Scope 3 emissions — including our direct, indirect and supply chain emissions — by 20% by 2025, WE CUT OUR EMISSIONS from a 2016 baseline. Our first step has been to THROUGH ENERGY EFFICIENCY, understand the origins of our GREEN BUILDINGS AND BETTER climate impacts. Our biggest impacts come from the goods TRANSPORTATION SOLUTIONS and services we purchase through our supply chain, followed by our buildings and facilities, including operation of our data centers.
61 Emissions at Mastercard Target: a 20% reduction in Mastercard’s SCOPE 2 absolute Scope 1, Scope 2 and Scope 3 INDIRECT Purchased location-based emissions by 2025, based electricity, steam, heating and cooling on a 2016 baseline. for own use
100% renewable energy for our global operations: • 2% solar generated onsite • 11% directly procured renewable energy • 87% renewable energy credits
SCOPE 3 INDIRECT SCOPE 1 UPSTREAM ACTIVITIES Stationary combustion of natural gas, diesel and jet fuel at owned and leased sites Purchased goods Capital Fuel- and energy- SCOPE 2 and services goods related activities Purchased electricity at owned and leased sites, including data centers at two U.S. sites
Upstream Waste generated Business SCOPE 3 transportation in operations travel Purchased goods and services, capital and distribution SCOPE 1 DIRECT goods, fuel- and energy-related activities, upstream transportation REPORTING COMPANY and distribution, waste generated in Employee Upstream operations, business travel, employee commuting leased assets commuting and upstream leased assets Company Company facilities vehicles
62 Scope 1 and 2 emissions Energy consumption
SCOPE 1 AND 2 EMISSIONS SCOPE 1 AND 2 BREAKDOWN BY CATEGORY 2016–18 2018 4,486 MTCO2e mWh 2016 5% ,214 6,587 2017 9% 71,504 4,828 2018 8% 5,007 57,687 4 94,728 5% 64,917 1% 52,859 2% cope 40,481 34 cope
SCOPE 1 AND 2 BREAKDOWN 74,463 62 2016–18 MTCO e 1,717 2 2016 2% ,214 2,001 2017 3% 1,246 ata Centers 71,504 2018 2% ffices 57,687 ravel 37,936 59,561 38% 60% 36,296 33,207 ata Centers 50% 47% 29,751 26,690 52% 46% ffices ravel
In 2016, we changed our GHG accounting methodology from ownership control to operational control in order to measure our emissions more comprehensively. Our Scope 1 and Scope 2 measurements now include both owned and leased sites. We also began calculating our Scope 3 emissions in 2016. Our data from previous years are therefore no longer comparable. The 2018 Scope 1 and Scope 2 decrease was the result of some of our larger energy-saving initiatives, including updated design standards, upgraded space design to use an open layout plan, and energy metering at all new and renovated spaces. Our GHG Inventory is subject to updates, per our Inventory Management Plan. 63 In collaboration with CDP Supply Chain Services and Trucost, our Sourcing and Supplier Management team identified the suppliers that contribute most of our Scope 3 emissions. Based on this analysis, we have defined four broad categories that constitute our biggest supply chain emissions: technical consulting, advertising, Addressing our sponsorships and consumer benefits, and real estate and biggest carbon computer-related services. Like many in our industry, we Building on this analysis, we examine impacts from travel footprint: supply have been working one-on-one and employee commuting, but chain emissions with suppliers to gain a deeper we go even further to include our understanding of their emissions purchased goods and services, Mastercard doesn't produce and to collaborate on strategies the capital goods we use in our physical goods, so more than to measure, disclose and reduce operations, and the fuel- and 70% of our emissions come their emissions. energy-related emissions not from the goods and services included in Scope 1 and Scope 2. we purchase from upstream We believe this broader approach suppliers. supports both our climate goals Addressing our Scope 3 supply and progress toward the Paris chain emissions makes up a Agreement. significant part of our effort to Since our base year of 2016, support the Paris Agreement. we have decreased our Scope 1, We have been working for quite Scope 2 and Scope 3 emissions by some time to reduce our Scope 42%. Even as our total purchasing 1 and Scope 2 emissions, and we increased in the past two years, increased our focus on Scope 3 the overall GHG intensity of our emissions in 2018. supply chain decreased. Dollar- for-dollar, our expenditures are less GHG-intensive, putting us on a good path to meet our 2025 absolute goal.
64 Scope 3 emissions By working with our suppliers, SCOPE 3 EMISSIONS we are able to develop more 2016–18 effective strategies to help them MTCO2e measure, report on and reduce their emissions. The CDP recognized Mastercard on its 2019 Supplier Engagement 2016 Leader Board. Mastercard was 84 ,277 the only payments company 20,400 to achieve an “A” grade when 54,842 evaluated against the Supplier 20,181 2 Engagement Rating methodology, which looks at governance, targets, Scope 3 emissions and value-chain engagement.
2018 2017 4 5, 62 471,614 38, 86 22,780 58,862 49,174 11,77 33 753,555 17,365 436
372,171 395,684 Employee commuting Business travel Waste generated in operations uel and energy related activities oods and services*
Our GHG Inventory is subject to updates, per our Inventory Management Plan. *Includes Purchased Goods and Services and Capital Goods 65 We invited suppliers that represented approximately 65% ENVIRONMENTAL SUSTAINABILITY of our global procurement spend SUPPLIER-ENGAGEMENT MODEL to report to the CDP. Of those suppliers, 50% responded, and we are pleased to report that Engaging our of those who responded: suppliers via CDP
To support our Scope 3 have identified opportunities to collaborate with us on emissions targets, we are 23% INVITE TO DISCLOSE working with suppliers on ways to reduce their GHG their climate initiatives. impacts. While some suppliers work with us for many years, we do not use have an approved science- the same suppliers every year, so 71% based target, are awaiting we have established an annual approval for one or anticipate target to engage a percentage setting one. of them. We aim to achieve that EDUCATE AND DEVELOP target every year through 2025. have reported their Scope 1 An important strategy is to and Scope 2 emissions, and engage suppliers through the CDP, 100% 55% have reported at least which affords greater visibility into one category of Scope 3 our supply chain GHG footprint. emissions. This allows us to begin setting expectations and plan further engagement with the suppliers. have allocated emissions to Mastercard, which helps us MEASURE AND SCORE 50% gain a better understanding of our true Scope 3 impacts.
For 2019, we increased the proportion invited to approximately 85% of our global procurement COMMUNICATE AND spend to drive progress toward COLLABORATE our 2025 science-based target reduction goal.
66 Energy efficiency and green buildings We enhance our environmental We also pursue certifications We were successful in performance by pursuing outside our owned campuses. Our reducing our Scope 1 and external green building Vietnam office was the first in Scope 2 emissions by certifications wherever possible that country to achieve the status implementing some larger and by working continuously to of LOTUS Gold for Small Interiors, energy-saving initiatives, improve the energy efficiency of and we were able to LEED-certify including updating design our buildings. We build, maintain more than 370,000 square feet standards to require energy and plan over time to improve in India. metering, plug-load management the sustainability of all our We also require all new and energy-efficient appliances; owned and leased spaces. buildouts to meet a leading upgrading space design to an Mastercard’s Global Workplace green certification standard and open layout plan, saving 1.25 Design Standards embed include energy-efficiency design watts per desk; and using energy efficiency into the design-and- standards. For instance, we are metering at all new and renovated construction process from using LEED v4.1 to recertify the spaces. Additional changes that the start. We pursue green interior spaces in our leased offices contributed to energy savings certification for all eligible in the U.S. and Latin America. include design guidelines that projects, aligning our green We gathered additional specify lighting levels per office building practices with global and primary data about our leased area, advanced lighting controls local standards. Today, our owned sites by installing sub-metering that account for office occupancy campuses are all Leadership in technology in many of our new and daylight hours, LED upgrades Energy and Environmental Design and existing office spaces. This and retrofits, and partnerships (LEED)–certified, and more than allows us to make targeted, site- with utilities to assess and identify 79% of Mastercard’s total square specific energy improvements energy-saving opportunities. footage is either green-building- that support our science-based certified or in a building that emissions goals. meets green certification for its region. In 2018, we certified eight additional buildings. To ensure that our properties continue to meet our high standards, we recertify them as needed.
67 Green buildings Countries with certified buildings Renewable energy We certified green buildings in 25 countries – up from 20 in 2017: 100% We have achieved 100% of Mastercard-owned renewable energy for our global Australia, Belgium, Brazil, Canada, Chile, campuses are LEED-certified real estate portfolio, and we aim China, France, Germany, Hungary, India, to continue meeting this goal, Indonesia, Ireland, Japan, Kenya, Korea, even as our portfolio expands. the Philippines, Poland, Singapore, South We are developing a long-term Africa, Spain, Taiwan, Turkey, United 79% strategy to shift a larger portion In 2018, these solar arrays Kingdom, United States, Vietnam of Mastercard’s total square of our energy sourcing from generated 1,725,811 kilowatt- footage is certified renewable energy credits and hours (kWh) of renewable directly procured renewable energy, or 9.6% of the electricity electricity to on-site solar and consumed at those offices, other direct, renewable sources. outperforming our projected When it comes to purchasing annual creation of 1.3 million renewable energy credits, we buy kWh. (This performance was a country-specific credits in many result of getting these projects locations where we have offices online sooner than expected and to help “green the grid” in those reaping the benefits of a sunnier- countries. than-average year.) In the next In 2018, we completed the three years, we plan to more than second phase of solar panel double on-site renewable energy development at our technology creation, partly via expansion to headquarters in Missouri and additional sites. at our global headquarters in Purchase, New York. These solar arrays will generate up to 15% of the electricity consumed at those locations.
68 Natural resource use We exceeded our goal of recycling, In all our spaces, we have bins diverting or composting 70% of waste in central locations to make generated in our owned facilities: We recycling easier. Additionally, we diverted 77% of waste from landfills. implemented a food- and paper- Based on this success, we have updated waste composting program in our 2019 goal and intend to recycle, divert our Purchase, New York, and or compost 80% of the waste generated St. Louis and Kansas City, Missouri, in facilities we own. offices. We also established a global protocol to eliminate single- Transportation use plastics from our offices; we now provide reusable drinkware, WASTE DIVERSION We are helping reduce the dishware and flatware, and we impacts of employee travel use compostable straws or none and commutes through the at all in our owned and leased use of virtual meetings and the facilities. purchase of carbon offsets for 77% 100% We recycle, reuse or donate all business travel. all of our office furniture globally, We also try to minimize the and we work with suppliers to need for employee car travel by decrease their use of packaging selecting office spaces that have of global waste diverted of electronic waste and waste. We have a pallet- high walkability scores and are from landfills diverted from landfills return procedure for our deliveries, close to public transportation. and we also work closely with We support our employees’ our furniture suppliers to ensure green transportation choices they use reusable packaging by providing bicycle allowances, such as blankets. Our global IT shuttle-bus services and car- WATER CONSUMPTION department works to ensure that charging stations (including new For owned buildings only we divert from landfills 100% of stations added at two of our the electronic waste from each U.S. offices and at our office in of our offices. Belgium, plus charging stations To reduce water use, we available at other leased office installed water-efficient fixtures spaces outside the U.S.). For 0.22m in all of our owned facilities, with people who bike, walk or run to kilogallons 0.15m a special focus on data center work, we provide on-site bicycle 0.12m cooling. We use stormwater kilogallons storage and showers. We also kilogallons runoff for landscape irrigation offer work-from-home policies. at our major campuses. 2016 2017 2018
69 ENVIRONMENTALLY Greener Payments Partnership: CONSCIOUS SOLUTIONS rethinking plastic cards Beyond managing our Even as the use of plastics Giesecke+Devrient and IDEMIA grows, people everywhere now to launch the Greener Payments own environmental recognize how plastics impact Partnership (GPP). Its mission is to the environment. Every year, reduce first-use polyvinyl chloride footprint, we take almost 400 million tons5 of plastic (PVC) in all cards and to research are produced, with plastics alternative materials for cards, advantage of in packaging materials now including recyclable, bio-sourced representing nearly half of all and biodegradable materials. While opportunities to plastic waste generated globally.6 plastic used in payments cards apply our people, Most is never recycled.7 A lot represents only 0.01% of plastic of plastic waste ends up in water volume, we intend to do our part.9 assets and innovation streams, and it is estimated that The GPP is looking at the more than 8 million tons8 of plastic lifecycle of payment cards to toward a more annually makes its way into the sea. identify viable, sustainable solutions Many consumers have started that we can scale up across the sustainable future. limiting single-use plastics such industry via collaborative action. as bags and straws and have We are confident that we can build begun to demand that businesses on recent research to drive large- We contribute environmentally use their influence for positive scale adoption of environmentally conscious solutions in a variety action on plastic. To support this friendly materials for payments of ways, from innovations that movement, Mastercard joined cards, as well as support end-of-life reduce first-use plastic in our with card manufacturers Gemalto, card recycling. cards to new kinds of payment systems that make it easier for people to afford and access clean energy and water. We also contribute to environmental solutions through such cross-sector partnerships as the Greener Payments 5 PlasticsEurope. (2018). Plastics - the Facts 2018. Partnership and the UN Global 6 United Nations Environment Programme. (2018). Single-Use Plastics: A Roadmap for Sustainability. Compact Cities Programme. 7 Ibid. 8 Jambeck, J. (2015, February 13). Plastic waste inputs from land into the ocean. 9 According to the September 2018 Nilson report, payment card shipments worldwide reached more than 6 billion in 2017. Assuming a typical card weight of five grams, this represents more than 33,000 tons (30,000 metric tonnes) (less than 0.01% of annual plastic manufacturing, which reached nearly 400 million tons). 70 Reducing the environmental impacts We are looking holistically at the lifecycle of cards — from their of cards and raising awareness about creation to use and on through end-of-life — to identify ways to the impacts of purchasing reduce environmental impacts and help cardholders track, understand and offset the carbon impacts from items they purchase.
Creation: How can we select better card material to reduce first-use PVC by 2025? We are considering a variety of materials, MATERIALS including ethically sourced Creation PVC, bio-sourced industrially compostable options, ocean- recovered or ocean-bound plastics, and chlorine-free options.
Offsetting: How can we help cardholders track, understand and reduce their carbon footprints through carbon offsetting?
Recycle: How can we support END OF LIFE IN USE centralized recycling programs Recycle Offsetting by engaging the companies that issue cards? We want to encourage card issuers to return cards at expiration so we can recycle precious materials and help achieve our ultimate zero- landfill target.
71 Developed by Mastercard Labs, our new PayGo API solution combines low-cost QR technology, Expanding our PayGo technology an open and interoperable to support access to clean energy technology, with the “internet of things.” This technology allows and water customers to make secure, efficient payments from their In many parts of the world, We partnered with M-KOPA mobile phones by scanning a people do not have access to Solar and Centenary Bank to use QR (Quick Response) code or affordable, clean energy and Mastercard’s Quick Response (QR) using a USSD (Unstructured safe water. In sub-Saharan payment technology in Uganda, Supplementary Service Data) Africa, for instance, 560 million giving more people a simple, interface. By expanding the PAYG lack access to electricity,10 pay-as-you-go (PAYG) option to partnership to include Centenary instead using kerosene, candles purchase M-KOPA’s affordable, Bank — a commercial microfinance and batteries. These are unsafe safe and clean solar energy. bank in Uganda serving 1.6 million and unreliable power sources, This program builds on our customers12 (a quarter13 of the and they can also harm the partnership announcement with country’s banking population) — environment. Water is also a M-KOPA Solar in 2017 by adding we have the opportunity to scale challenge: Globally, one in nine new product capabilities we hope up this payment solution. people lacks access to safe will help scale PAYG solutions, so Looking forward, we hope water,11 and one in three lacks more people — in Uganda and that by making this payment access to a toilet. At Mastercard, beyond — gain access to clean technology widely available we are looking for new ways to energy and water. and partnering with new support access to environmental organizations, we’ll be able to resources that are essential to help more people access the clean everyday life, including clean energy and water they need. energy and water.
WE ARE LOOKING FOR NEW WAYS TO SUPPORT ACCESS TO 10 United Nations Development ENVIRONMENTAL RESOURCES Programme. (2009, November). The Energy Access Situation in THAT ARE ESSENTIAL TO Developing Countries.” EVERYDAY LIFE 11 water.org. The Water Crisis. 12 Centenary Bank. (2019). 2018 Annual Report. 13 Ibid. 72 WE ARE PARTNERING WITH MORE THAN 150 GLOBAL CITIES TO MAKE PUBLIC TRANSIT MANAGEMENT SMARTER AND IMPROVING MORE EFFICIENT SUSTAINABILITY IN URBAN TRANSIT This influx opens up This can shorten lines and tremendous opportunities, from speed passengers through Cities are growing at increased cultural and commercial turnstiles, helping make growth to innovation: Today, environmentally sound transit an unprecedented 93% of the world’s patents are the more convenient choice. We generated in cities.16 Because are also developing incentives rate, with 6 million rapid urban growth impacts the for people to travel during environment, however, 70% of non-peak times, reducing people moving to global carbon-dioxide emissions congestion and helping transit urban areas every now come from cities.17 systems support more riders. Public transit can help reduce Our next-generation urban month in search of these environmental impacts, so mobility solutions fall into we are partnering with more than three categories: physical card opportunity. 150 global cities to make public solutions that help riders “tap transit management smarter and go,” digital and mobile and more efficient. We are also solutions that help riders book working to encourage ridership their entire trip through a single By 2050, around 70% of the and boost transit systems’ app and intelligent mobility world’s population is expected capacity to meet growing solutions that allow cities to to live in urban areas.14 Urban demand. With our solutions, learn from data insights derived tourism is also booming: people can use payment cards or from commuting trends. By 2030, 1.8 billion people are mobile devices as the only tickets expected to visit cities annually.15 they need to get around — by train, bus, ferry or bike-share.
14 United Nations. World Urbanization Prospects: The 2018 Revision. 15 United Nations World Tourism Organization. (2011, October 11). International tourists to hit 1.8 billion by 2030. 16 Metropolitan Policy Program at Brookings. (2013, February). Patent Prosperity: Invention and Economic Performance in the United States and its Metropolitan Areas. 17 United Nations Human Settlements Programme. Global Report on Human Settlement 2011, Hot Cities: Battle-ground for Climate Change. 73 City Possible Building on our partnership- based approach to improving public transit, we pioneered City Possible. This new model for To date, our partnerships with urban collaboration brings cities, cities have brought a number companies and communities of positive impacts: together to identify common • In London, 55% of all Tube and challenges and create solutions rail PayGo journeys are regularly that can be scaled up broadly. made using contactless As a company, Mastercard payment cards or mobile focuses on advancing inclusive devices,18 serving cardholders urbanization, using our technology, from more than 100 countries.19 data insights and partnerships • In Sydney, following a successful to improve efficiency, promote trial with Mastercard, economic growth and ensure commuters and tourists can inclusion. We are excited that City now Tap & Go® across all of the • In 113 stations21 in Milan, Possible supports mayors and city city’s ferries and light railways. Mastercard has implemented22 leaders in upgrading urban quality • In Singapore, Mastercard was campaigns to drive contactless of life. the first international payments usage in transit and Three interconnected pillars form network to partner20 with the encourage similar behavior for the foundation of City Possible: Land Transport Authority to micropayments beyond transit. launch SimplyGo, an account- • Over the course of just three 1. Global network: based ticketing system that months in Kaohsiung, Taiwan, Cities and communities define enables “tap & go” on the city’s we launched a fully open loop challenges they have in common. public transport system. transit system. 2. Urban co-creation: The global network co-develops and pilots innovative urban solutions to those common challenges. 18 PaymentsSource. (2019, April 10). How the London Underground brings in 53,000 new contactless users a day. 3. Solution scaling: 19 Transport for London. (2017, July 6). One billion journeys made by contactless payment Network partners align social on London's transport network. impacts with business objectives 20 The Strait Times. (2019, March 7). New SimplyGo system to let bank cards double up as to rapidly scale and sustain co- public transport travel cards. created solutions. 21 Finextra. (2018, June 29). Milan subway goes contactless. 22 The ATM Group. (2018, June 28). First in Italy, Milan's Metro Goes Contactless. 74 WE ARE HELPING LEAD PARTNERSHIPS THAT CAN ACCELERATE IMPLEMENTATION OF THE UN SUSTAINABLE DEVELOPMENT GOALS “Together, we can
As a key component of City make cities more Possible, Mastercard has partnered with Harvard inclusive, more University’s Technology and Entrepreneurship Center (TECH), UN Global responsive and which is hosting a series of programs for global city leaders Compact Cities more sustainable — to identify common challenges, Programme enabling cities discuss solutions, share data and exchange insights related Mastercard joined the Steering to build on each to urban planning, mobility Committee of the UN Global services and more. To date, these Compact Cities Programme other’s progress.” programs have taken place in Las (the Global Compact’s urban Vegas, Melbourne and Boston. arm), through which city and Participants also have access to regional governments collaborate Miguel Gamiño Jr., an online community where they with the private sector and civil executive vice president can continue the dialogue with society to address complex global for Global Cities, Mastercard their peers. challenges on the local level. Looking ahead, Mastercard As the Steering Committee’s and Kisio will invite and select only corporate partner, cities from the global City Possible Mastercard helps select partner network to co-create and pilot a cities. We are supporting the Mobility-as-a-Service platform development of a sustainable that fully integrates with local business model for the cities transit authorities. program, and we are helping lead partnerships that can accelerate implementation of the UN Sustainable Development Goals.
75 ETHICAL AND RESPONSIBLE 05STANDARDS
76 OUR APPROACH Our work is driven by the belief that upholding the highest standards of ethics and responsibility is not an option — it is the only way to succeed in business in today’s world.
77 Our deep commitment to ethical operations and legal compliance Awards, recognition shapes every interaction with and partnerships Ask Marko or Neil our employees, our stakeholders for advice and our customers. We build our operations around the At Mastercard, we are touchstones of decency, integrity and respect in service of our four proud to have received core values: a number of prestigious Trust: We act with integrity and Upholding these values in respect; we encourage openness our workplaces and across our awards recognizing our Partnership: We work as one operations is one reason why team to the benefit of all — Mastercard is the place where ethical and responsible consumers, merchants, business the best people want to be. performance. partners, governments and the Mastercard earned a number communities we serve of awards recognizing our efforts to treat people with decency Agility: We act with a sense of and to earn and maintain our Ethisphere Institute urgency and deliver value through customers’ trust. We continued Mastercard earned its third our innovation and execution to build on those efforts with consecutive place among the Initiative: We are empowered important updates to our data World’s Most Ethical Companies to take bold and thoughtful privacy practices, as with our for our efforts to lead with action, and we hold ourselves EU General Data Protection integrity and to promote accountable for delivering results Regulation (GDPR) compliance ethical business standards efforts, our data security and practices, internally and innovations that include Threat externally Scan and AI Express, and our expansion of the scope of our Reputation Institute In addition, we maintain supplier diversity efforts. For the second consecutive year, professional partnerships Mastercard earned a place in the with the Business Ethics Global CSR RepTrak list of 100 Leadership Alliance and other companies recognized for their organizations dedicated to outstanding commitment to advancing the integrity of corporate social responsibility business. Our participation in these groups allows us to share DiversityInc Mastercard’s best practices Mastercard ranked No. 4 on the and learn from our peers’ global list of Top 50 Companies successes and challenges. for Diversity 78 ETHICS AND COMPLIANCE Mastercard’s continued business success is tied, in part, to our commitment to meet and exceed our partners’ and customers’ expectations that we will deliver our products and services in the right way.
Ethical business practices
Our approach to ethical We also require our CEO and operations starts with our Code other senior officers to abide by of Conduct. It is the cornerstone a Supplemental Code of Ethics, of our Ethics and Compliance which reflects our heightened system and central to our culture expectations for them to lead by of decency. example, particularly in taking We offer the Code in multiple special care to avoid conflicts languages to guide all our of interest. employees in making the right decisions, including detailing managers’ responsibilities, avoiding conflicts of interest, honoring our policies and ensuring privacy and data protection.
79 Working to ensure compliance
Every Mastercard employee To increase transparency participates in a mandatory, regarding our investigative process in-depth curriculum of online and associated outcomes, twice compliance training. The training a year we provide our employees curriculum consists of a two- with a Summary of Investigative year rotation of more than Activity that contains investigative 15 training courses, including metrics and select anonymized Code of Conduct, anti-money case profiles. laundering, trade sanctions, data To encourage the use of the privacy, information security, Helpline and other avenues for preventing insider trading and raising ethical or legal concerns, workplace conduct that includes we have a Non-Retaliation Policy harassment and discrimination. that forbids retaliation against In addition to the above anyone who asks a question, raises training, which lays the foundation a concern or provides good-faith of our culture of decency and information about potential legal compliance, our Mastercard Ethics or policy violations. Anyone found Helpline offers all employees, in breach of the Non-Retaliation contingent workers, third Policy will be subject to disciplinary parties and the public at large action, up to and including a confidential, around-the-clock termination of employment. service to report suspected Mastercard sits at the center of violations of the law, our Code of the global payments industry, and Conduct or any other company we have made innovative efforts policy. The Helpline is hosted to prevent our products, services by an independent third party, and technologies from being used and anonymous reports can be for laundering money, financing made where permitted by local terrorist operations or evading law. We promptly, thoroughly economic sanctions. and objectively investigate all concerns with our relevant internal investigative functions, and we bring in external support, such as outside counsel, as needed.
80 Antitrust and competition law
EVERY MASTERCARD Political activity Mastercard is committed to a EMPLOYEE UNDERGOES and public policy fully competitive marketplace, encouraging open and dynamic IN-DEPTH TRAINING ON Mastercard is committed to markets that drive innovation and engaging appropriately in the value for our company and our OUR CODE OF CONDUCT political process and policy arena customers. Mastercard competes in a manner that informs and independently in the marketplace affects the debate concerning by creating innovative products issues related to our business, and services that are attractive Our comprehensive risk- We have developed an investors and customers — to its customers. Mastercard mitigation strategy — including innovative compliance platform including, but not limited to, maintains internal policies and policies, procedures and employee to allow us to regularly monitor payment system innovation, training to educate employees education, in addition to our compliance with anti-corruption data privacy, the regulation of regarding anticompetitive technological tools — ensures procedures across our global digital transactions, taxation business practices. that we meet our regulatory operations, and each year we and other issues disclosed in the Mastercard’s Global Antitrust obligations. We continue to conduct a comprehensive anti- company’s public filings. and Competition Law Policy is incorporate technology and corruption risk assessment. We strive to engage on these incorporated into its Code of dynamic, data-driven controls to Our Chief Compliance Officer issues in the most responsible and Conduct, which is reviewed annually advance our ability to identify, (CCO) leads and oversees our ethical way. Mastercard maintains and attested to by every employee. assess and mitigate risks. Ethics and Compliance system, internal procedures to ensure This policy is designed to ensure We comply with anti-corruption which encompasses a broad set that the company’s political that every employee is aware of laws around the world, including of integrated programs. The and public policy activities fully and sensitive to legal principles the U.S. Foreign Corrupt Practices CCO also chairs Mastercard’s comply with all laws, regulations regarding competition and knows Act and the U.K. Bribery Act. Our Ethics and Compliance and company policies. Any such how to raise questions and voice Code of Conduct and related Operating Council, a network of activities in which Mastercard concerns. In addition, Mastercard policies prohibit offering payments Compliance Liaisons that spans engages are based solely upon the has developed Competitive or anything of value to improperly our business lines and regions best interests of the Company Intelligence Guidelines that set influence a business decision or and helps drive organizational and are made without regard to forth areas for the appropriate gain an unfair business advantage, engagement, alignment and the private political preferences gathering of market intelligence. and we have implemented training accountability within our Ethics of its officers and/or executives. An online antitrust training and internal controls to proactively and Compliance system. The Mastercard semiannually course incorporates the key manage corruption risks, wherever CCO reports functionally to the discloses on its website political antitrust principles and guidance they arise. Audit Committee of the Board of contributions and independent contained in both polices. Regional Directors and administratively to expenditures, if any. counsel also provides in-person the General Counsel. training for relevant business units, where needed.
81 The Risk Management Committee (RMC), composed of senior executives, is responsible for guiding our ERM program; several RMC members report regularly to the Board and its committees to help establish the appropriate risk We developed our culture and align risk management Enterprise Risk Management with Mastercard’s strategy. More RESPONSIBLE RISK (ERM) program to support information about the three MANAGEMENT comprehensive, integrated standing Board committees that oversight and management of further oversee risk management existing and emerging risks, and is available in our 2019 Proxy Properly managed to facilitate transparent risk Statement and 10-K Risk identification and risk reporting Factors filing. risk-taking in business to senior management and the Mastercard’s Board and is a critical component Board. All employees play a role management work to continuously in helping Mastercard achieve improve our risk-management of innovation and its strategic objectives through framework and organization at the execution of their assigned both the corporate and business- leadership. responsibilities and are expected unit levels. We established new to understand, monitor and processes and methodologies to escalate risks related to their evaluate risks against our Risk Our Board of Directors, which roles, while recommending Appetite Statement targets and to oversees our risk-management controls where appropriate. balance the need for stability and framework, seeks to foster a risk- An important element of our reliability against agility, innovation aware culture while engaging in risk-management framework and entrepreneurial risk-taking. thoughtful risk-taking to serve includes embedding risk our business objectives. champions in the business to help drive risk-management OUR BOARD AND activities within business units in order to better prepare the MANAGEMENT company to respond to new CONTINUOUSLY and emerging risks. IMPROVE OUR RISK-MANAGEMENT PRACTICES
82 Privacy by Design: embedded in how we work
We protect our network Privacy by Design is at the heart PRIVACY, DATA against security threats and also of Mastercard’s privacy strategy. PROTECTION, offer a range of security products We build privacy and data AND SAFETY AND and services designed to prevent protection into how we design, SECURITY SOLUTIONS and detect cyberattacks and develop and deliver our products fraud and to protect the security, and services. confidentiality and integrity of our We use personal information Privacy and data account holders’ and customers’ only in a legitimate, fair and information. inclusive manner, with full respect protection are woven for the choices made by individuals. In addition, we always look for ways into the fabric of our to encrypt, de-identify or anonymize business and are personal information while making sure each product is still easy to use a vital part of our and convenient. For instance, when Organizational we process a transaction, we may responsibility to our culture replace an account holder’s account number with a token so that the customers, account Our core commitment to privacy actual card number is not accessible runs deep at Mastercard, to the merchants from whom the holders and employees. starting with our Board, CEO cardholder shops. and senior leadership. Any time we use personal We train every employee to information in a new way — such Our long-standing commitment treat data with the utmost care as by using biometric data to to data ethics helps us earn in compliance with all applicable authenticate individuals — we and maintain the trust of laws and regulations and in line conduct a privacy and data our partners and contribute with our culture of decency. protection impact assessment to better outcomes while to ensure we are aware of, respecting people’s privacy. and can minimize, any risks to people’s privacy and security. We contractually require our partners and vendors to meet or exceed our high standards for privacy and security, and we conduct annual security reviews of our systems and theirs to ensure compliance. 83 WE HOLD OURSELVES Individuals’ ACCOUNTABLE TO THE HIGHEST data rights STANDARDS OF GLOBAL PRIVACY Under the GDPR and many AND DATA PROTECTION LAWS privacy laws, individuals have a right to understand how Mastercard handles their data. We updated our Global Privacy Accountability Notice and our service-specific privacy notices to provide a We hold ourselves accountable Our new Data Protection clear and simple explanation Audits and to the highest standards Officer, appointed in 2018 and of how we handle their Certifications of global privacy and data based in Europe, is responsible for personal information. protection laws. When the ensuring our ongoing compliance In response to the GDPR, we Privacy and compliance checks, EU General Data Protection with the GDPR. The Data launched a new My Data online as well as audits of our data Regulation (GDPR) entered Protection Officer Is involved in all portal to enable individuals and privacy practices, are a into full force in May 2018, issues that relate to the GDPR and to exercise their new rights to regular feature of how we ensure Mastercard took advantage of the protection of personal data access, correct, modify or move the health of our policies and the opportunity to review all in the European Economic Area their personal information. The practices. of our products, services and (EEA), including the handling of portal is currently available to Mastercard’s security, privacy processes to ensure we meet and privacy requests from individuals, all users in the European Union and information practices exceed the law’s requirements. and is the contact point for the and will soon be accessible are reviewed by U.S. financial We have also taken the EEA data protection authorities. worldwide. We have also regulators on a biannual basis. opportunity to expand our Mastercard partnered with IBM updated our comprehensive Our Binding Corporate Rules commitment to ethical data to launch Trūata, an independent incident-response process to (BCRs), which have been reviewed practices by making the core data trust designed to anonymize investigate and remedy any and approved by European consumer protections of the EU- data and continue providing data incident and inform people data protection authorities, GDPR available to individuals in analytic services in a GDPR- if the incident may have put allow us to transfer European other jurisdictions by the end of compliant manner. In November, their privacy at risk. We regularly personal information to other the first quarter of 2020. This Mastercard was recognized by conduct data-breach exercises to Mastercard entities globally in includes the right for individuals the International Association test and continuously improve the a way that respects people’s to understand the personal data of Privacy Professionals for the effectiveness of our process. privacy. In Asia-Pacific, we’ve been Mastercard has collected about innovation mindset that helped awarded privacy certifications them, the right to obtain a copy shape Trūata. under the Asia-Pacific Economic of the data, have the data Cooperation (APEC) Cross-Border corrected and/or deleted. Privacy Rules and the Privacy Recognition for Processors system. (For more information: http://cbprs.org.)
84 Data and privacy WE BUILD PRIVACY AND DATA governance PROTECTION INTO HOW WE Several of Mastercard’s comprehensive assessment of DESIGN, DEVELOP AND DELIVER senior executives hold the the program and related privacy responsibility of upholding our and data protection risks to the OUR PRODUCTS AND SERVICES company-wide commitment to Audit Committee of our Board best practices in data security. of Directors.
Chief Data Officer Chief Security Officer Constructive Information Oversees Mastercard’s efforts Develops and oversees the collaboration security to maintain a responsible, ethical policies, programs and controls enterprise data program that we have created to reduce and We believe that ethical, Mastercard takes a proactive adheres to our high standards prevent logical and physical responsible data use can be approach to monitor and combat for data quality, curation and risks to our people, intellectual a transformative force for the growing cybersecurity threat governance. Reports to the assets and tangible property. societal good. environment. President of our Data & Services On an annual basis, and more That is why we actively We make strategic investments Business but is an enterprise-wide frequently as needed, the Chief engage with governments, to keep our network secure, and position. On an as-needed basis, Security Officer (CSO) provides regulators and policymakers we partner with industry experts the Chief Data Officer provides a comprehensive assessment of around the world to show how to anticipate future threats. an update to senior management the program and related risks our industry uses information Our four integrated Corporate and the Board of Directors on and vulnerabilities to the Audit for innovation and economic Security functions — Prevention, our data practices, including Committee of the Board of development and to explain how Security Engineering, Response an assessment of our data risk Directors. Additionally, the CSO we incorporate privacy, security and Regional Security — lead our and progress related to the use periodically conducts briefings for and data protection into all global asset-protection efforts. of information as part of our the Chief Executive Officer, or a of our products, services and Led by our Chief Security Officer, innovation strategy.. designee, on security initiatives technologies. These discussions this corporate function is staffed and emerging threats, trends enable us to continue building with teams consisting of industry- Chief Privacy Officer and tactics that could impact the next generation of payment leading professionals and experts Leads our compliance with the organization. technologies while also protecting from government services around worldwide laws and regulations the rights of individuals and the globe, including the U.S. Secret regarding how we collect, use, Data Protection Officer groups. We also partner with Service, the FBI, the U.K. National share, store and transfer data, Supports our compliance with think tanks, academics and Crimes Agency, the NSA and the and manages our relevant the GDPR and the protection of nonprofit organizations such U.S. Army Cyber Command. engagements with regulators personal data in the European as the Rockefeller Foundation and policymakers. Reports Economic Area (EEA), including to promote the use of data for directly to Mastercard’s General the handling of privacy requests social impact. Counsel. On an annual basis, or from individuals to exercise their more frequently if needed, the new rights. Reports to the Global Chief Privacy Officer provides a Chief Privacy Officer. 85 Our efforts in securing Mastercard Fusion Center We have created a multilayered Mastercard built on the success of our Fusion Center, a cross- Safety and security strategy to respond to functional security intelligence security solutions department that serves as a hub attacks on our corporate and for all of our cyber and physical In an increasingly complex security defenses. security landscape, Mastercard payment networks through a Over the course of the year, puts safety first. we optimized our performance We are continually developing number of efforts improving to improve response time and new and better technologies to our core security programs. effectiveness during global events, protect payments while ensuring natural disasters, and service and a seamless consumer experience. security incidents. The Fusion We also help our stakeholders Center’s Crisis Management team anticipate, mitigate and prevent managed identified incidents, threats of ever-greater frequency, We protect our network against The methodology for these and by optimizing the Mastercard scale, severity and sophistication. security threats and also offer a assessments — and our annual Intelligence Center’s intelligence Developing industry-leading range of security products and certifications — incorporates feeds and sources, the Fusion standards to ensure the safety services designed to prevent multiple industry-recognized Center has significantly reduced of Mastercard transactions is and detect cyberattacks and frameworks, including those of analysis time, allowing us to act one part of our multilayered fraud and to protect the security, the U.S. National Institute of proactively rather than reactively, security strategy, which also confidentiality and integrity of Standards and Technology (NIST), make better business decisions involves protecting infrastructure, our account holders’ and Special Publication (SP) 800-115 and more rapidly achieve closure devices and data, helping banks customers’ information. Technical Guide to Information of these crisis events. and merchants identify genuine Our security program is Security Testing and Assessment, We also established a consumers and stop fraud, regularly audited. Several U.S. Open Web Application Security partnership with the National and applying cutting-edge and international government Project (OWASP) methodology, Cyber Security Centre and other technologies such as artificial agencies conducted detailed on- Payment Card Industry (PCI) intelligence groups in London to intelligence and biometric and site assessments of our network standards, Penetration Testing prevent cash-out attacks digital authentication to continue security efforts. We also hosted Execution Standard (PTES) and on ATMs. to protect payments around numerous on-site and remote International Organization for the world. customer assessments and Standardization (ISO/IEC 27000). penetration tests.
86 Some of our WE ARE WORKING TO INCREASE leading solutions THE USE OF CONTACTLESS EMV chip cards to secure CARDS GLOBALLY TO FURTHER face-to-face payments We are rapidly scaling up our REDUCE FRAUD WHILE EMV technology in the U.S. as An enterprise-wide An established Security a way to dramatically reduce IMPROVING THE CONSUMER vulnerability management Operations Center (SOC) fraud at the point of sale. By EXPERIENCE program that monitors the and Fusion Center including this dynamic digital entire Mastercard network data in every transaction, we have reduced overall fraud levels Tokenization in card transactions. Building We created our tokenization on our 20 years of history in platform — the Mastercard Digital creating and maintaining the EMV Enablement Services (MDES) — in standard, Mastercard is currently 2013 to leverage tokenization and working to increase the use of bring the same comprehensive contactless cards around the level of cryptographic protection EMVCo globe to even further reduce fraud to digital transactions that our Secure Remote Commerce An integrated security A global insider threat while improving the consumer EMV chip devices bring to in- Mastercard participated in the engineering program that program, led by our experience. Smart Cities and store transactions. MDES has creation of the new EMVCo has established foundational Corporate Security Transit use cases have formed continued its rapid growth: We Secure Remote Commerce security practices it maintains function, that monitors the basis for change in consumer conducted 1.3 billion transactions (SRC) standards, which will within the business units interdepartmental products behavior and mass adoption through MDES by expanding our secure, streamline and scale of contactless functionality. tokenization services to a total of e-commerce checkouts. The deployment of contactless 1,706 issuers in 60 markets. Comparable to a single point- functionality in London, through Mastercard launched MDES of-sale acceptance terminal in a Transport for London, helped in for Merchants, which uses physical store, SRC will provide reaching the “tipping point” in tokens and cryptographic data a consistent digital checkout the U.K.; similarly, Mastercard to free merchants of the need experience; when combined expects to emulate this success to store sensitive account details with our existing token and A holistic incident- A scalable access-management in the U.S. by offering contactless while also keeping consumers’ authorization standards, it will management team that infrastructure that strengthens functionality on New York City’s payment information safe and also deliver the ubiquity, security, drives a far-reaching, our physical and virtual system- MTA and other transit systems in up-to-date, even if their account convenience and transparency consistent response to access controls American cities. details change. This advance that merchants and consumers identified and active threats is making online payments expect and deserve. more convenient and reducing declined transactions. MDES for Merchants has already accounted for more than 45 million payment authorizations since launch. 87 Safety Net Decision Intelligence Safety Net helps limit the One of the key challenges in For each transaction, Decision financial, reputational and payments fraud, especially in the Intelligence assesses: business impact of large-scale digital channel, is distinguishing fraud attacks by leveraging between genuine and fraudulent • Transaction security based on Mastercard’s global network For acquirers, Safety Net transactions rapidly, accurately widespread fraud monitoring, via a turnkey solution. provides specific monitoring and with minimal friction for fraud rules, transaction fraud For issuers, Safety Net criteria and rules designed to the consumer. models and profiles — does the provides network-level transaction evaluate transactions from an Mastercard’s Decision purchase fit the consumer’s monitoring that identifies and acquirer perspective — analyzing Intelligence platform uses artificial transaction behavior? limits the impact of cyberattacks overall activity for a specific intelligence to analyze insights when issuer or processor systems acquirer and/or cardholder from our network to improve • Consumer transaction are breached. Safety Net provides across multiple ATMs, merchants, consumers’ shopping experiences, attributes based on consumer an external layer of defense — countries and more to determine increase transaction approval account and device information independent from customer if a merchant is the target of a rates, minimize fraud for retailers — are the card, device, IP address systems — with selective online large-scale attack. and prevent banks from losing and other attributes valid? authorization controls that block Designed to protect merchants money. Decision Intelligence is a transactions according to multiple from large-scale cyberattacks and real-time authorization-decisioning • Consumer segmentation criteria. fraud events, Safety Net monitors solution that applies thousands based on insights into account Safety Net operates in a transactions at the global of data points and sophisticated spending that help define the passive state until a situation network level, employing artificial modeling techniques to each value and engagement of the becomes critical, providing intelligence to continuously transaction, simplifying these consumer with their issuer gradually escalated responses monitor more than 200 million insights into a single transaction- — how valuable is the consumer? to detected threats that allow transactions a day. By identifying decision score that helps issuers customers to control their fraud and isolating systematic threats fine-tune their authorization strategies and minimize any within milliseconds, Safety Net decisions in order to approve more impact to consumer acceptance. intelligently declines fraudulent genuine transactions without transactions on behalf of an increasing risk. issuer within minutes. Since its introduction, Safety Net has saved banks millions of dollars in potential fraud.
88 NuData Solutions In March 2017, Mastercard • Captures and matches Enhanced Behavioral acquired NuData and its passive biometric fingerprint image on device biometrics biometrics and behavioral the card intelligence Security analytics capabilities. The solution • Utilizes biometric (fingerprint) as distinguishes authentic users developments an alternative to PIN/signature from potential fraudsters, based at EMV POS terminals on their online, mobile app and As part of our continuing • Works with current merchant smartphone interactions. These efforts to stay ahead of the ever- POS terminals to eliminate the device-level insights enable changing threat environment, need for hardware or software merchants and issuers to improve Mastercard unveiled a number Threat Scan upgrades their authorization decisions. We of security innovations: This payments-specific solution have been integrating NuData’s intelligently assesses issuer • Secures biometric data — tools into Mastercard’s robust EMV 3DS 2.0 authorization processes for ensuring that no data leaves suite of fraud-management EMV 3-D SECURE (3DS2) is the vulnerabilities. Threat Scan offers the card and that the data is Process data and and security products. In 2018, new industry standard defined issuers a self-service solution to not shared with merchants compare to past events we monitored 400 billion events by EMVCo to help merchants and test their authorization-process • Offers a simple, at-home worldwide, 28% of which we issuers authenticate card-not- configurations by simulating enrollment process that identified as high-risk and flagged present transactions. The 3DS2 external threats, and we have proceeds in two minutes, to the merchant involved. In transaction protocol addresses developed the tool to test against without issuer intervention; and addition, we analyzed global login changes to the digital landscape a number of known criminal • Relies on PIN/signature data to reveal that 49% of all login and represents a continued attack vectors that manipulate authentication in case biometric attempts are fraudulent. effort to improve security and authorization data to breach fails or cannot be attempted. Build a the cardholder experience by security systems. risk score Early detection harnessing the rich data provided In order to give issuers advanced by digital commerce. As we Biometric Card alerts about potential fraud, introduce 3DS2 around the global, The Biometric Card adds security we partner with specialist data consumers and merchants alike to each in-person transaction and providers that scan Dark Web will benefit from stronger two- provides the best user experience marketplaces for information and factor authentication and broader to the consumer. Users can add combine that data with predictive support for payment channels the biometric authentication technologies to stop fraud before within apps, in browsers and feature to any existing Mastercard it starts. This solution accelerates through the “internet of things.” product, from the Standard card Trigger an detection by six months to nine to the World Elite. The biometric action months ahead of a confirmed card offers a variety of advanced account-data-compromised alert. capabilities to cardholders:
89 HUMAN RIGHTS AND As part of the Responsible RESPONSIBLE SOURCING Sourcing Program’s mission, we are shifting our supplier relationships from a transactional We extend our culture approach to one built on of decency and respect developing deep engagement around our shared values. In for all people across our addition to working with more than 250 of our suppliers to operations. Everywhere help them manage, report and reduce their emissions, we work, spanning our we are empowering our small and diverse-owned suppliers global workforce, we by providing resources and remain steadfastly educational opportunities about financial literacy, sustainability committed to treating and capacity-building. In 2019, Mastercard increased all people fairly and our commitment to responsible sourcing by hiring a Responsible with dignity. Sourcing and Supplier Diversity Lead, who will help us develop our formal program, including respect for ethics and human Within our workforce, rights, supplier diversity and Mastercard provides equal environmental sustainability. employment opportunities and More information about how treats all employees fairly and our Responsible Sourcing Program equally and without regard engages with suppliers to to any protected distinction decrease our Scope 3 greenhouse such as age, gender (including gas emissions is available in the gender identity), marital Environmental Stewardship status, civil partnership status, section on page 66. sexual preference, disability, color, nationality, race or ethnic origin, or religious belief.
90 In accordance with the U.K. “We’re committed Modern Slavery Act, we have issued a statement outlining the Supplier diversity to driving and Mastercard ranked No. 4 on steps Mastercard takes to ensure DiversityInc’s global list of the that no slavery takes place in our Just as we value the unique Mastercard spent more with fostering social Top 50 Companies for Diversity, business or supply chains. We contributions and perspectives U.S.-based diverse suppliers than which includes recognition of our proudly endorse the principles of of our global workforce, we ever did previously in a single and environmental focus on minority- and women- the Act; they mirror our stance as Mastercard strives to spread year; our Tier 1 and Tier 2 spend owned suppliers. an ethical company that believes inclusion and diversity with diverse suppliers represented sustainability in doing well by doing good. Our throughout our supply chain. more than 10% of our total full statement on modern slavery Through our Supplier Diversity U.S.-based spend. To further throughout our and human trafficking details the program, we actively seek to increase our impact, we are supply base. With policies and provisions we have build and maintain business working to educate our suppliers Ethics and implemented to eradicate modern relationships with diverse and about the importance of having that said, our human rights slavery from our operations and small businesses — suppliers a supplier diversity program of supply chain. that reflect our global operating their own. expectations are Guided by our Supplier Code of environment, help enrich and In early 2019, we launched Conduct, Mastercard requires strengthen the communities a new partnership with growing; it’s no every supplier we work with to where we work, and provide us WEConnect International, a abide by labor laws, operate with high-quality, innovative global network that connects longer just about in line with globally recognized WE REQUIRE products and services. women-owned businesses with human rights principles and We define diverse suppliers qualified buyers around the high-quality and avoid all use of forced labor, EVERY SUPPLIER as companies that are majority- world, to determine the most whether prison labor, indentured WE WORK WITH owned, -operated and -controlled effective strategy to increase our cost-efficient labor, bonded labor or otherwise. by one or more U.S. citizens who global spend with female-owned solutions anymore. Although we expect each TO ABIDE BY identify as an ethnic minority, businesses. We are prioritizing supplier to define its own human LABOR LAWS, woman, veteran, LGBT+ or as a our efforts to empower women- We want to do rights policy and approach, person with a disability. In our owned businesses as part of our we require it to be consistent OPERATE IN LINE efforts around supplier diversity, investment in our economy and business with with both our Supplier Code of WITH GLOBAL we also include small businesses our communities. Conduct and the UN Universal that are certified by, and eligible companies that Declaration of Human Rights. HUMAN RIGHTS for, assistance from the U.S. Small In addition, our Supplier Business Administration. We are share our values.” Code of Conduct details our PRINCIPLES hosting Supplier Diversity Days expectations and requirements AND AVOID ALL at some of our U.S. and U.K. around child labor, freedom of locations to educate companies Bryan Fuller, association, compensation and USE OF FORCED about winning business, diversity executive vice president of supply chain working hours and conditions, LABOR in the workplace and more. and corporate services, Mastercard discrimination, health and safety, and much more. 91 “Mastercard’s commitment to doing well by doing good reminds us that when the world thrives, businesses thrive. This report reflects what we do at Mastercard – we aim to benefit people, partners, shareholders and consumers alike through commercially sustainable social impact. We’re on a journey and I’m excited to see how much further we can go and the impact we can make for ourselves, our communities and the world.”
Kristina Kloberdanz, chief sustainability officer, Mastercard
92 ASSURANCE LETTERS
93 GRI INDEX 102-1 Name of the organization About Mastercard: Who we are, page 5 102-24 Nominating and selecting 2019 Proxy Statement, page 39 the highest governance 102-2 Activities, brands, products, About Mastercard: Who we are, pages 6 to 10 body and services 102-30 Effectiveness of risk Ethical and responsible standards: Responsible risk management, 102-3 Location of headquarters About Mastercard: Who we are, page 7; Global locations management processes page 82 102-4 Location of operations About Mastercard: Who we are, page 6; Global locations 102-35 Remuneration policies Inspired workforce: Attracting and engaging top talent, page 50; 102-5 Ownership and legal form About Mastercard: Who we are, page 7 2019 Proxy Statement, pages 48, 64 to 82 102-36 Process for determining 2019 Proxy Statement, pages 48, 64 to 82 remuneration 102-6 Markets served About Mastercard: Who we are, page 6 102-37 Stakeholders’ involvement 2019 Proxy Statement, pages 48, 64 to 82 102-7 Scale of the organization About Mastercard: Who we are, page 6 in remuneration 102-8 Information on employees Inspired workforce: Our approach, page 40 and Global Inclusion and 102-38 Annual total compensation Inspired workforce: Attracting and engaging top talent, page 50 and other workers Diversity, page 44 ratio 102-9 Supply chain Environmental stewardship: Ensuring our sustainability, pages 61, 102-40 List of stakeholder groups About Mastercard: Stakeholder engagement, page 17 64; Ethical and responsible standards: Human rights and responsible sourcing, pages 90-91; Procurement Categories 102-41 Collective bargaining No employees in the US are subject to collective bargaining agreements agreements 102-10 Significant changes to the Financials and SEC filings organization and its supply 102-42 Identifying and selecting About Mastercard: Stakeholder engagement, pages 17 to 18 chain stakeholders 102-11 Precautionary Principle or Environmental stewardship: Our approach, pages 57 to 58; Ethics 102-43 Approach to stakeholder About Mastercard: Stakeholder engagement, pages 17 to 18 approach and responsible standards: Responsible risk management, page 82 engagement 102-12 External initiatives About Mastercard: Stakeholder engagement, page 17 General Disclosures 102-44 Key topics and concerns About Mastercard: Sustainability at Mastercard, page 15 raised 102-13 Membership of About Mastercard: Stakeholder engagement, page 17 associations 102-46 Defining report content About Mastercard: About this report, page 19 and topic Boundaries General Disclosures 102-14 Disclosure 102-14 Introduction: CEO letter, page 2 Statement from senior 102-47 List of material topics About Mastercard: Sustainability at Mastercard, page 15 decision-maker: Strategy 102-48 Restatements of None 102-15 Key impacts, risks, and About Mastercard: Sustainability at Mastercard, pages 14 to 15; information opportunities Sustainability governance, page 16 102-49 Changes in reporting None 102-16 Values, principles, Code of Conduct standards, and norms of 102-50 Reporting period About Mastercard: About this report, page 19 behavior 102-51 Date of most recent report About Mastercard: About this report, page 19 102-17 Mechanisms for advice and Ethical and responsible standards: Ethics and compliance, pages 79 102-52 Reporting cycle About Mastercard: About this report, page 19 concerns about ethics to 80 102-53 Contact point for About Mastercard: About this report, page 19 102-18 Governance structure About Mastercard: Sustainability governance, page 16; 2019 Proxy questions regarding Statement, page 18 to 19 the report 102-19 Delegating authority About Mastercard: Sustainability governance, page 16 102-54 Claims of reporting in About Mastercard: About this report, page 19 accordance with the GRI 102-20 Executive-level About Mastercard: Sustainability governance, page 16 Standards responsibility for economic, environmental, and social 102-55 GRI content index GRI index, page 94; all disclosure numbers refer to the GRI Standards topics published in 2016 102-21 Consulting stakeholders on About Mastercard: Stakeholder engagement, page 17 102-56 External assurance About Mastercard: About this report, page 19 economic, environmental, and social topics 103-1 Explanation of the Inclusive growth: Our approach, pages 20 to 26; Inspired workforce: material topic and Our approach, pages 38 to 40; Environmental stewardship: Our 102-22 Composition of the highest 2019 Proxy Statement, page 39 its Boundary approach, pages 56 to 62; Ethical and responsible standards: Our governance body and its approach, pages 76 to 79 committees Management Approach 103-2 The management Inclusive growth: Our approach, pages 20 to 26; Inspired workforce: 102-23 Chair of the highest 2019 Proxy Statement, page 39 approach and its Our approach, pages 38 to 40; Environmental stewardship: Our governance body components approach, pages 56 to 62; Ethical and responsible standards: Our approach, pages 76 to 80 94 103-3 Evaluation of the Inclusive growth: Our approach, pages 20 to 26; Inspired workforce: 306 Management approach Environmental stewardship: Ensuring our sustainability, page 69 management approach Our approach, pages 38 to 40; Environmental stewardship: Our disclosures: Effluents and Management Approach approach, pages 56 to 62; Ethical and responsible standards: Our Environmental Standards waste approach, pages 76 to 81 306-2 Waste by type and disposal Environmental stewardship Ensuring our sustainability, page 69 201-1 Direct economic value 10-K method generated and distributed 401 Management approach Inspired workforce: Recruiting and retaining a diverse workforce, 201-2 Financial implications CDP disclosure disclosures: Employment page 47 and other risks and opportunities due to 401-2 Disclosure 401-2 Benefits Inspired workforce: Attracting and engaging top talent, pages 50 to climate change provided to full-time 51 employees that are not 203-2 Significant indirect Inclusive growth: Our approach, page 25 provided to temporary economic impacts or part-time employees: Employment 205 Management approach Ethical and responsible standards: Ethics and compliance, page 81 disclosures: Anti-corruption 401-3 Parental leave Inspired workforce: Employee health and well-being, page 52 Economic Standards 205-2 Communication and Inspired workforce: Attracting and engaging top talent, page 51; 403-6 Promotion of worker health Inspired workforce: Employee health and well-being, pages 52 to 53 training about anti- Ethical and responsible standards: Ethics and compliance, pages 80 corruption policies and to 81 404 Management approach Inspired workforce: Attracting and engaging top talent, page 51 procedures disclosures: Training and education 206 Management approach Ethical and responsible standards: Ethics and compliance, page 81 disclosures: Anti- 404-2 Programs for upgrading Inspired workforce: Attracting and engaging top talent, page 51 competitive behavior employee skills and transition assistance 206-1 Legal actions for anti- 10-K programs competitive behavior, anti-trust, and monopoly 404-3 Percentage of employees Inspired workforce: Attracting and engaging top talent, page 51 practices receiving regular performance and career 302 Management approach Environmental stewardship: Our approach, pages 57 to 58 development reviews disclosures: Energy Social Standards 405 Management approach Inspired workforce: Our approach, pages 39 to 40 302-1 Energy consumption within Environmental stewardship: Ensuring our sustainability, page 63 disclosures: Diversity and the organization equal opportunity 302-4 Reduction of energy Environmental stewardship: Ensuring our sustainability, page 63 405-1 Diversity of governance Inspired workforce: Global inclusion and diversity, page 44 consumption bodies and employees 302-5 Reductions in energy Environmental stewardship: Our approach and Ensuring our 405-2 Ratio of basic salary and Inspired workforce: Recruiting and retaining a diverse workforce, requirements of products sustainability, pages 57 to 69 remuneration of women page 48 and services to men 303 Management approach Environmental stewardship: Ensuring our sustainability, page 69 406 Management approach Inspired workforce: Recruiting and retaining a diverse workforce, disclosures: Water and disclosures: Non- page 47 effluents discrimination Environmental Standards 303-5 Water consumption Environmental stewardship: Ensuring our sustainability, page 69 410 Management approach Inspired workforce: Employee health and well-being, page 53 disclosures: Security 305 Management approach Environmental stewardship: Our approach, pages 57 to 58 practices disclosures: Emissions 415 Management approach Ethical and responsible standards: Ethics and compliance, page 81 305-1 Direct (Scope 1) GHG Environmental stewardship: Ensuring our sustainability, page 63 disclosures: Public policy emissions 415-1 Political contributions Ethical and responsible standards: Ethics and compliance, page 81 305-2 Energy indirect (Scope 2) Environmental stewardship: Ensuring our sustainability, page 63 GHG emissions 418 Management approach Ethical and responsible standards: Privacy, data protection and safety disclosures: Customer and security solutions, pages 83 to 85; Mastercard Rules 305-3 Other indirect (Scope 3) Environmental stewardship: Ensuring our sustainability, pages 65 privacy GHG emissions 305-5 Reduction of GHG Environmental stewardship: Ensuring our sustainability, pages 60 emissions to 65
95