Overcoming the hurdles towards sustainable finance
Consumers still view financial institutions as falling short in terms of social responsibility
Data from BrandVue, Savanta’s market-leading consumer tracker, highlights that less than 1 in 10 (9%) consumers on average associated the attribute “Socially responsible” with finance companies, compared to 25% for “Trustworthy” and 18% for “Expert”.
Knowledge of green products is limited
Over 70% of consumers don’t feel knowledgeable about the green finance products available and almost half (46%) say they don’t have any knowledge at all of green mortgages.
Only a small minority are positive towards taking out or moving to a green financial product
Around 6 in 10 of those surveyed said they are either not very or not at all likely to takeout or move to a green product in the next 12 months. This is especially true for green car loans (68%), green mortgages (67%) and green pensions (64%).
Understanding consumer’s sustainable values
To understand how intentions and actions towards sustainability vary, Savanta has developed its own Eco Segmentation based on consumer awareness, knowledge, ability to care and behaviours around sustainable measures.
The segmentation study found those with the highest intention to live sustainably and who have a ‘general’ concern for sustainability as an issue are much more likely to take out or move to one of these green products.
This audience type can be categorised into two personas:
- “Empowered Individualists” – Affluent, right-leaning consumers who prioritise their immediate surroundings over systemic social change. They lean towards pessimism and would invest in sustainability if they see personal benefits or lifestyle enhancements.
- “Committed Changemakers” – Left-leaning with a positive international worldview. Concerned about sustainability but trusts experts and optimistic about society’s problem-solving abilities.
Price and scepticism are barriers to uptake
3 in 10 (29%), give “eco-friendly products cost more” as a reason not to move to these green financial products. 1 in 4 (26%) are “not convinced how much real impact my decision will have on the environment”.
Providers need to consider these two viewpoints when designing products and communicating about them if they are to shift the dial.
A “Green” financial future for consumers is achievable, but a way to go
The future of the planet is on everyone’s minds. Whilst consumers may think about sustainability in their everyday lives when shopping and recycling, sustainable finance is considered far less.
To combat this, financial institutions need to consider taking greater steps to improve awareness, educate and encourage consumers to choose their more sustainable financial products.
Brands must look to create affordable green products that are more readily available and be able to demonstrate the green credentials of their products. Consumers need easy-to-understand information and a better understanding of how sustainable finance can contribute to a better world.
The finance industry has a very important role to play and indeed has been stepping up. Incorporating sustainability into their business practices and promoting a more sustainable future should give consumers a reason to feel optimistic about their choices for a greener financial future.