As the financial services sector continues to invest in sustainability initiatives, many customers remain unaware of their potential impact. Shifting the narrative from obligation to opportunity is key — engaging customers on sustainability not only resonates with their values but strengthens loyalty and trust.
Over the past years, sustainability has emerged as a top priority in boardrooms, rapidly reshaping the financial services sector. Banks and financial institutions have invested billions into sustainable investments, robust reporting mechanisms, and the education of their workforce. This surge of activity reflects not only regulatory pressures, but a growing recognition of the role financial institutions can play in driving positive environmental and social change.
Yet, despite these efforts, the conversation around sustainability in financial services often remains narrowly focused on compliance. As we adjust to this new reality, a key question arises: How can banks move beyond compliance to make sustainability a genuine growth driver?
Our recently published book, The Demand Revolution, explores this very challenge and opportunity. It provides strategic insights and frameworks to help organizations tap into the vast commercial opportunity presented by sustainability as a transformative and demand-driven megatrend.
Shifting the mindset from obligation to opportunity
The narrative around sustainability in financial services often revolves around meeting regulatory requirements. However, this compliance-driven mindset overlooks the real opportunity: engaging customers on a positive subject that increasingly resonates with their values and financial decisions.
To truly embrace sustainability, banks and financial institutions must shift their perspective. Rather than viewing sustainability as an obligation, they must recognize it as a growth opportunity. Globally, an average investment of $3.5 trillion per year in green transition is expected to achieve a net-zero economy by 2050, all of which requires financing. Financial institutions play an essential role in driving forward positive change by supporting the green transition via advisory and financing options to help their corporate as well as personal customers step into a greener, more sustainable future.
Bridging the perception gap by educating customers
Although sustainability has become an increasingly important purchasing criteria, with most customers being aware and committed to making sustainable choices, there remains a significant knowledge gap. Many customers are unaware of their bank’s ESG initiatives. In fact, 41% of customers report that they do not know what their primary bank or service provider is doing to reduce its environmental impact. This presents a paradox as sustainable financial services can often drive significant impact.
Research shows that actions such as investing in sustainable funds or green pensions often drive far greater environmental benefits than individual lifestyle changes like reducing meat consumptions or giving up flying. Though, of course, such investments are not a replacement for activities that reduce consumption — both are needed to fight climate change. Yet, many customers remain unaware of this potential, emphasizing the critical role banks can play in financing and supporting the green transition.
Making sustainability a strategic priority for growth
The financial services sector stands at a crossroads. Embracing sustainability as a strategic priority and taking it to the core of the business is no longer optional; it is essential for relevance and success.
Banks that position themselves as sustainable advisors can build trust, foster loyalty, and offer a clear value proposition. By actively guiding customers towards impactful financial decisions, banks and financial institutions can not only contribute to a greener future but also strengthen their competitive edge. Done right, sustainability can offer a range of benefits allowing banks to better justify their fees. Evidence suggests that customers who are aware of or are using “green” products from their banks are between 10% and 16% more satisfied, leading to increased loyalty.
By moving beyond compliance and becoming active educators and advisors, banks can position themselves as leaders in the green transition. In doing so, they can drive meaningful change while unlocking new avenues for growth. Our Global Sustainability Study 2024 reveals that consumers are ready to embrace sustainability, but businesses must meet them halfway.
Act now to position your business for a sustainable and profitable future. Reach out to our financial services sector experts today.
Sources:
Energy Transitions Commission (2024). Retrieved from Financing the Transition.
EPSI Rating (2022). Bank 2022 Bæredygtighed.
Make My Money Matter (2021). Pension fund carbon savings research: A summary of the approach. UK: Make My Money Matter.
Simon-Kucher & Partners (2022). Sustainability’s new normal: What 2024 consumers expect.
