Ethical and environmental considerations are becoming increasingly important for consumers – and are looking to banks, insurers and other financial providers to help them make financial decisions with these in mind, new research commissioned by CRIF, the consumer and credit information provider, has found.
Both European and US consumers are making more climate-conscious decisions in their lives, according to new CRIF research published ahead of November’s COP29 meeting of world leaders.
Seventy-six per cent have taken action to combat climate change or reduce their carbon footprint, including increasing or taking up recycling (34 per cent), taking shorter showers (33 per cent) and switching to more sustainable forms of energy (11 per cent).
However, despite these efforts, the vast majority of consumers are not attempting to achieve the same results through the way they bank or manage their finances. CRIF says that only eight per cent of consumers have put money into environmentally responsible investments and even fewer (seven per cent) have used a carbon calculator to determine the impact of their spending on the environment.
Only 12 per cent of consumers 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 of consumers (54 per cent) now want their banks and insurers to offer them, including investment options in environmentally friendly companies, or climate-conscious insurance products, rising to two-thirds (65 per cent) of 18 to 34-year-olds.
Sara Costantini, regional director, UK and Ireland, CRIF
Sara Costantini, regional director, UK and Ireland at CRIF, commented: “Financial providers 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 make sure 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.”
Calling for change
Younger adults are leading the charge in calling for these types of products. Fifty-five per cent of consumers aged 18 to 34 say they are more inclined to choose a financial provider that actively protects the environment, compared to 44 per cent of those aged 55 and over. Meanwhile, 57 per cent of the youngest consumers (18 to 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 of financial providers themselves, with 71 per cent 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.
Thirteen per cent of consumers said they would switch from providers that lack good environmental practices, rising to 19 per cent for younger generations (18 to 34). As well as showing a willingness to switch providers, 13 per cent of 18 to 34-year-olds said they had already swapped providers due to them feeling they had poor environmental practices or were not aligned with their values.
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