People are more motivated by sustainability impact than financial savings when it comes to making greener lifestyle choices, according to new behavioural research by carbon footprint management experts, Cogo. The study found that 64% would act when shown the carbon impact data of their choices compared to just 55% when shown the financial savings on the same actions. This 9% difference equates to 4.6 million UK banking users*.
“We’re surprised by the findings,” says Emma Kisby, Cogo CEO for EMEA. “It shows us that even in a cost-of-living crisis, people are still inspired to act when they see how changing a habit can help the planet, as well as their wallet.
“We expected that financial savings would be a strong motivation, and carbon data might strengthen it further by adding an emotional element. But, what we have actually found is that when it comes to making sustainable lifestyle changes, people are more willing to do it for altruistic reasons, over simple financial gain – even when many are tightening their belts.”
The effect was especially noticeable when asking about actions that either do not typically save much money (switching to a renewable energy supplier, washing clothes on 30°C instead of 40°) or have an upfront cost (switching to an electric vehicle, installing loft insulation).
Lack of green finance information holding consumers back
But even among the climate conscious, there was a lack of awareness about the sustainable finance products which are already offered by many high street banks. Only 16% of people are aware of financial options that can help their household become more environmentally sustainable.
One in four (23%) would like to hear more about financing options from their banks. The most in-demand options were green loans, mortgages, bonds and grants. While financial savings can incentivise climate action, one way to motivate people to reduce their environmental impact is by presenting carbon saving data. As banks possess transactional data, they can help customers understand the carbon emissions associated with their spending. The first step is to help customers understand where their spending has the most impact on the planet, then offering features to help customers track this impact over time.
The findings make it clear that there is a potential market of consumer appetite for more support in making sustainable behaviour changes with an upfront cost, which few can easily afford during the cost-of-living crisis. The Cogo study found that 68% were feeling insecure with their financial situation, so banks have a clear opportunity to address this insecurity.
Banks are missing crucial green banking opportunity
“It’s clear that many consumers don’t feel supported to confidently take sustainable action when it comes to their finance products,” says Emma. “Banks are a vital service which most of us are in contact with on a regular basis – almost everyone has a bank account. This means your bank is the ideal place to get information on the climate impact of spending decisions and other financial choices.
“The consumer demand for green banking options is rising, and the role which financial services play in the climate crisis – and solving it – is increasingly understood. Banks need to prepare for the age of the conscious consumer and work to align their products and services to a sustainable way of banking and living. They can get a headstart by tailoring financial solutions based on the carbon saving actions their customers are most willing to take.”
Previous Cogo research found that 48% of UK mobile banking users are specifically in support of their bank helping them to make more pro-environmental purchasing choices.