When it comes to trying to be more sustainable, lots of us focus on the things we spend our money on, but how many of us think about the sustainability of money itself?
From credit cards to bank accounts, there are ever-increasing ways to spend, save and invest while helping the environment… it’s just that consumers need much more education about them.
We surveyed 500 UK consumers about the financial products they use and we found low overall awareness about the sustainability of their choices. Most tellingly, only 6% of people thought changing where they invest their money would have the biggest impact on reducing their carbon footprint. Despite the emergence of new funds that divert investment away from fossil fuels, this option was ranked as least impactful, just below becoming vegan (10%).
Using a more sustainable payment type came in third, with 11% of the vote, while flying less scored 23%. Refusing single-use plastic is the action that most people believe will have the biggest impact on their carbon footprint (28%).
Consumers think avoiding single-use plastic will have a greater impact on their carbon footprint than sustainable investing.
This begs the question: how many consumers are actually aware of where their funds are going across their savings and investment products, and how important is it to them? More than half of respondents (55%) claim to know where their money is going – but only 37% say that it matters to them.
Meanwhile, of the 44% who are not aware, 26% say they care, highlighting an opportunity for education. This opportunity is even bigger when it comes to pensions; 31% of Brits are interested in more information regarding where their funds are being invested.
Willingness to change is low
Because people underestimate the impact of making more sustainable financial decisions, there is relatively low interest in doing so. Only 16% of respondents say they would be willing to change where their money is invested to reduce their carbon footprint, while just less than a quarter would switch to a more sustainable payment type.
Right now, Brits say the sustainability credentials of a savings or investment product is the least important factor when shopping around. Out of seven factors, respondents ranked ‘the organisation has committed to a net zero in their carbon footprint’ in last place. Just above this was, ‘I know my funds are supporting good and sustainable businesses.’
Deemed far more important was the returns on offer (in first place), followed by the ease and convenience of the product. Offering rewards and providing flexibility were also given priority when assessing a financial product. This means providers likely need to do more to communicate the benefits of making sustainable financial choices.
Brits expect bank accounts to be sustainable
While more needs to be done to trigger conscious consumerism in the finance sector, Brits hold some types of providers more accountable for sustainability than others. When we asked respondents if there were any products they would actively cancel if they found out the providing organisation had no sustainable measures, the results showed interesting variety.
Most likely to be cancelled are savings accounts (30%), yet other investment products were not held to such high standards (21%). Pensions were even less likely to be cancelled (19%). Meanwhile, bank accounts were the second most-likely to be cancelled (25%) suggesting that account products are under more scrutiny.
Bank accounts are the most likely type of product to be cancelled for poor sustainability.
A quarter of respondents (25%) said they would cancel a cryptocurrency provider for poor sustainability, which could be bad news for Bitcoin, recently in the spotlight for its shocking environmental impact. It’s worth noting that efforts are being made to minimise the carbon footprint of the cryptocurrency, including SolarCoin, which aims to incentivise the production of solar energy, and BitGreen, an energy-efficient alternative that requires fewer calculations.
Least likely to be cancelled due to disappointing environmental credentials are mortgages (12%) and personal loans (16%). The conclusion we can draw from this is that consumers are a little less bothered about morals when it comes to borrowing money.
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