Green Finance, Member Exclusive

Green Finance Briefing: Consumers want more sustainable banking

  • Studies show that consumers are increasingly looking to align their values with their wallets – and younger generations are taking the charge in sustainable investing.
  • We also look at the climate tech space with an ecosystem map, and have a great suggestion for your next movie night – a new documentary on greenwashing.
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Green Finance Briefing: Consumers want more sustainable banking

Dealing with the effects of climate change is a collective issue, and pressure is mounting for all corners of the economy to step up to the challenge and decarbonize. But while we may have a long road to actual sustainable solutions, increasing consumer awareness is key to pushing this agenda forward.   

In fact, most US adults are taking steps in their daily lives to combat climate change and believe that companies should take an active role in this as well, a new study from Compose[d] found.

Consumers also know that the financial system is not isolated from the climate change agenda – 70% of survey participants believed that banks, specifically, have an impact on climate change.

The largest banks and financial institutions in the US – the likes of JPMorgan Chase, Citi, Wells Fargo, and Bank of America – are the biggest financiers of the global fossil fuel industry, a fact that is viewed negatively by climate-conscious consumers.

Still, the majority of respondents were unaware of their bank’s activity around investment in fossil fuel or renewable energy projects, and yet they felt that banks have a responsibility to be transparent in their investment activity disclosures. 

Nevertheless, it looks like alignment with personal values is quite important – it was the second-most prized service by bank customers, right after higher interest rates on savings accounts.

The environmental filter is increasingly present in people's financial lives. Consumers don't want to be part of the problem, and they're voting with their wallets. 

The study found that 81% of consumers want the ability to opt out of investments that contribute to climate change, in industries such as deforestation, tobacco production, arctic drilling, fracking, coal-fired power plants and tar sands extraction.

At the opposite end of the spectrum, purpose-driven investments are a popular approach. The vast majority of consumers want their investments to have a positive impact on the planet. 

And Millennials are leading the way – they're the most active in the ESG space, with one in three Millennials holding ESG investments.

But even though folks want to engage in sustainable investments and prefer banking at value-aligned institutions, only 14% of adults prioritize investment portfolios when selecting a bank.

However, 71% of Gen Z and Millennials would consider switching to a bank that prioritizes responsible investments.

What we're writing

ESG giving rise to a new political divide

ESG is drawing political battle lines between Democrats and Republicans. These three letters, an unfamiliar acronym to the wider public not too long ago, are now at the center of a new political divide

Could the US climate bill be the push the system needed?

The climate bill could catalyze a pivotal moment for the financial services industry to view the clean energy sector as one of opportunity rather than compromise.

Just look at the charts 

Seven broad climate verticals

Source: Climate Tech VC

What we're reading 

Remember HSBC's Stuart Kirk? He returned to the ESG debate

BlackRock + ESG = drama

Climate Tech VC's new post on plastic vs biomaterials: Life in bio-plastic, it's fantastic

PitchBook's first Carbon & Emissions Tech Report explores VC trends in the nascent sector and spotlights opportunities in carbon tech, green industry, built environment, and land use.

Video of the week

Journeyman Pictures strikes again with this documentary on greenwashing, digging into the false corporate claims of climate action.

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