In recent years, society as a whole has become more aware of making sustainable and eco-friendly choices. Banking isn’t the first industry people think about when making environmentally conscious decisions, but it provides funding for the industries that contribute to climate change. Banking is among the largest industries by revenue in the US; therefore, leaders of the industry have a responsibility to make more conscious decisions, like providing funding to fossil fuel businesses. Offering options or taking measures to be more sustainable is both an easy and overwhelming task. Trends are pointing to consumers striving to be more mindful of their impact and wanting to use brands that hold similar values.
Consumer trends and projections show that people want to be more mindful of their impact. A 2021 study by Mastercard found that 58% of adults are aware of their impact, and 85% of respondents want to take personal action to fight environmental challenges. More than half believe it’s more important now than ever before for companies to be more eco-friendly and sustainable. Consumers are interested in green banking products and are willing to dedicate almost half of their savings or monthly credit card spending to a product. Many individuals question whether their impact is making a difference on a global scale. They lack the knowledge and understanding that their bank can provide. A bank offering recycled plastic credit and debit cards, pledging to plant trees, or offering green subscription services can make individuals feel like their decision to be more environmentally conscious will have an impact. 80% of consumers say they are more likely to support a brand that promotes environmental causes.
Becoming a more sustainably conscious financial institution is not the massive undertaking it might appear to be. Banks can offer incentives to customers to encourage signing up for eStatements, like a cash bonus, discounts on monthly maintenance fees, or carbon footprint trackers. Financial institutions in Europe, like NatWest, have implemented these trackers into the mobile app so users can view an estimate of their carbon footprint and get tips on how to reduce it. To make this a possibility, the bank partnered with CoGo, a carbon management expert group that has worked with financial institutions for over 10 years. Banks partnering with organizations that promote environmentally conscious values could make the product offering process easier, foster positive public relations, and encourage customers to expect more accountability from their bank. Eco-banks like Aspiration Bank offer a cash-back checking account and debit card that track spending impact through an intuitive mobile app. The bank also offers a monthly subscription service that earns 10% cash back at select merchants, comes with an upcycled debit card made from ocean-bound plastic, and carbon offsets for every gas purchase. Climate First Bank offers specialized green loan options to clients for renewable energy, EV charging, rooftop solar, or purchasing certified carbon offsets.
The Net Zero Banking Alliance (NZBA) has committed to financing climate action that will transition the economy to net-zero greenhouse gas emissions by 2050. Over 140 banks in 45 countries, which make up 41% of global banking assets, have joined the initiative. Within the industry, there are different certifications banks can gain to signify their commitment to the cause. Financial institutions that have pledged not to finance new fossil fuel companies or projects can earn a Fossil Free Certification. A Green America Certification can be earned when a financial institution focuses on social justice and environmental responsibility and completes an assessment.
Climate change and its effects on the global environment become more apparent every year. The banking industry has a responsibility to its customers and the world to take more proactive measures. US coal production and consumption increased since 2020, which is not possible without financing from banks. Mastercard created the Priceless Planet Coalition platform to address and promote tree restoration across 6 continents. With over 130 corporate partners, like Citi, BMO, and Wells Fargo, Mastercard’s goal through the platform was to restore 100 million trees worldwide by 2025. Certain financial institutions have launched marketing campaigns to highlight climate change and bring awareness to the cause. Prior to its merger with BMO, Bank of the West created a sand billboard on a California beach in partnership with Sustainable Surf, a non-profit organization. The Before It Disappears campaign washed away the day it was created, sending a message on how coastal ecosystems are slowly losing the battle against climate change. Many eco-conscious banks are operating as online-only option, allowing them to offer higher rates and lower fees. Clean Energy Credit Union is dedicated to offering affordable financing options for clean energy products and services. The credit union also promises its members to make investing in clean energy easy and accessible, and every dollar invested is funded in other members’ clean energy projects. The most significant impact is felt when society comes together to address a cause.