London, 23 October 2024
London, 23 October 2024
Consumers are increasingly looking to banks, insurers and other financial providers to help them make more ethical and environmentally conscious decisions around their finances, new research finds.
Commissioned by CRIF, Europe’s leading provider of consumer and credit information, and published ahead of November’s COP29 meeting of world leaders, the research finds European and US consumers are making increasingly climate conscious decisions in their lives.
Three quarters (76%) say they have taken action to combat climate change or reduce their carbon footprint, including increasing or taking up recycling (34%); taking shorter showers (33%) and switching to more sustainable forms of energy (17%).
However, these efforts are not being replicated in how they bank or manage their finances. Overall, less than one in ten (8%) consumers have put money into environmentally responsible investments and even fewer (7%) have used a carbon calculator to determine the impact of their spending on the environment.
As it stands, consumers believe too few financial providers are offering similar services or are failing to communicate their availability. Only 12% say they have noticed providers talking about their environmental initiatives and related environment, social and governance (ESG) activity.
In response, demand for greener products and services is rising. Over half consumers (54%) now want their banks and insurers to offer them, including investment options in environmentally friendly companies, or the choice to take out climate-conscious insurance products, rising to two thirds (65%) of 18–34-year-olds.
Younger adults are leading the charge in calling for these types of products. Over half (55%) of consumers aged 18–34 say that they’re more inclined to choose a financial provider that actively protects the environment, compared to 44% of those aged 55 and over. Over half (57%) of the youngest consumers (18-24) say they would also be willing to share more data if it helped them make more environmentally compliant decisions around their finances.
The findings also highlight the expectations on financial providers themselves, with 71% indicating they would be more likely to use a provider that is transparent about its operations, alongside the risk of inaction on ESG-related initiatives.
One in ten (13%) consumers said they would switch providers if they were found to lack environmental practices, rising to one in five (19%) for younger generations (18-34). As well as showing a willingness to switch providers, 13% of 18–34-year-olds said they had already swapped provider due to them feeling they had poor environmental practices or were not aligned with their values.
Sara Costantini, Regional Director for the UK & Ireland at CRIF said:
As with all other aspects of their lives, people are increasingly using products that align with their values, and financial services are no exception. Financial providers, however, are evidently falling short of keeping up with sustainable demands, particularly from younger consumers who are increasingly making financial decisions based on environmental factors. To bridge the gap, retain current customers, and attract the next generation of consumers, banks must simply offer more environmentally friendly financial products. The next step is to ensure that they’re communicating these offerings effectively to ensure consumers feel fully supported in making more informed, and crucially more sustainable, choices related to their finances.
The new data forms part of CRIF’s 2024 Banking on Banks report series, with its most recent report looking at ESG and shifting consumer values.
The first report explored credit and debt, examining the economic backdrop that consumers are facing, and which products and services are needed, while the second report provided an overview of the challenges and opportunities for banks, insurers, and other financial institutions when it comes to data sharing and trust.
