ESG in banking: How banks can adapt their strategy to appeal to an increasingly socially conscious audience

Banks are no strangers to incorporating new technologies od adhering to regulatory requirements. In recent years, only a few have taken the next step to incorporate sustainable consumer offerings into their product portfolio. This presents a significant opportunity for banks to differentiate themselves and capture the loyalty of environmentally conscious consumers.

An Ipsos study shows that 31% of consumers actively seek out sustainable, organic and fair-trade products. Notably, the study found that these consumers are willing to pay a 10% premium for these products, which highlights the potential for companies to differentiate themselves and secure a competitive edge.

Further research shows that the trend should continue to grow at a faster rate since millennials (25-40 year olds) are more environmentally and socially conscious than previous generations. A Fidelity study shows that 65% of millennials prefer to buy from socially responsible companies.

A growing demand for sustainable products and services (and a willingness to pay a premium for them) presents a significant opportunity for banks to enhance their offerings and capture the loyalty of environmentally conscious consumers.

For banks wanting to capitalize on the growing trend toward sustainable financial products and services, there are many existing technologies that can be leveraged.

CO2  tracking is available in our Mobile and Web Banking solutions, and we have gone even a step further with our ToPay Green, which, as an SDK, can be easily integrated into any bank’s existing app or within Netcetera’s own white-label Mobile Wallet solution. By analyzing a user’s individual transaction data, ToPay Green allows a bank’s customers to track their equivalent CO2 emissions, freshwater consumption, and social costs. And it takes it a step further by actively encouraging users to reduce their carbon footprint using gamification.

This heightened awareness encourages users to make more sustainable decisions, such as choosing to commute using an e-bike or choosing more eco-friendly food delivery services. The SDK can be quickly and easily implemented, seamlessly enriching the bank’s offering and strengthening its appeal to the growing segment of environmentally aware customers.

As the demand for more sustainable financial offerings continues to grow, the time for banks to leverage their Digital Banking solutions to integrate ESG principles into their consumer offerings is now. Like many strategic changes, it will be executives and ESG managers who’ll need to champion this change within their business.

If your banking app is missing a CO2 tracker, contact us to see how incorporating our solution could help your business provide greater value to a fast-growing segment of environmentally aware customers.