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For 'greens' sake

The future of financial products

As the cost of living looms, most consumers have taken a step back from focusing on green products with the perception they are likely to cost more. Are financial institutions hitting the snooze button on green messaging and products?

For greens sake blog image
Kate Namukasa Consultant 17/08/2023
At least one in three claiming they are likely to take out a green product in the next 12 months.
Consider the three Rs. Sending the right messages through the right channels to the right people

In our recent thought piece, ‘The future for “green” financial products: can consumer apathy be overturned?’, we revealed that new or unconventional products (such as green products) can be seen as more expensive.

To find out what this means today, we used data from our consumer trackers to better understand how financial institutions are progressing with this agenda and what more could be done.

Should financial institutions shelve or sustain their ESG offerings?

Despite cost being a barrier, the motivation or intention to take out a green product exists with at least 1 in 3 claiming they are likely to take out a green product in the next 12 months.

And for some, ESG is considered to be a fundamental part of a business’s brand; 4 in 10 say it is either quite important (27%) or extremely important (12%) when it comes to brands and businesses they buy from.

By providing loud, clear, and sustained messaging around sustainable products, businesses can increase brand love

Looking at ESG sentiment as a nation, around half (48%) think that ESG should be at the forefront of any business’s undertakings. This sentiment is stronger in regions in the North, inc. Scotland (52%), and among those with a higher social grading (ABC1 52%).

 

With ESG being high on consumers’ agendas, brands should look to increase Brand Love by being more vocal.

If providers are going to claim sustainable efforts, they should be mindful of greenwashing

By promoting green initiatives, brands have the potential to boost their appeal and awareness, however, this should be supported by action, or businesses risk being accused of green or social washing.

Just over four in 10 (43%) of the nation agree businesses promote their ESG credentials without taking real action, and this belief could increase if providers do not walk the talk.

Some financial institutions have already been called out on greenwashing and the FCA last year proposed new rules to tackle the issue

To date, most of the major financial institutions that are household names have already been called out for greenwashing in one way or another – such as green hashing (overstating sustainable efforts) and or green hushing (understating green practices) – so much so that the FCA proposed rules around the types of ESG claims the sector could and could not make in order to support an ecosystem of building or rebuilding trust and integrity within the sector.

Whilst many consumers have the will, it’s clear that most don’t have the awareness and understanding of how to go financially green.

Financial institutions need to increase awareness of the ESG products and initiatives that they have on offer. They need to make sure messaging is clear, consistent, and regular.

Currently, consumers feel that green financial products will be more expensive and/or deliver less than conventional products. Providers need to deliver competitive green products and/or communicate the benefits while dispelling any unfair myths.

If financial institutions want their business to stand out with the right audience, they need to identify where these audiences are, and market through the right channels, with messages that cut through.

Savanta’s Eco Segmentation report

In our recent Sustainability Segmentation report, we identified several consumer segments based on awareness, knowledge, ability to care and behaviours, to understand how intentions and actions towards sustainability vary.

Using this segmentation, we found two key groups that we describe as “Empowered Individualists” and “Committed Changemakers” who are more likely to take out or move to a green financial product.

These two groups have the highest intention to live sustainably and have a ‘general’ concern for sustainability as an issue.

Download the full report – For ‘greens’ sake


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