Greenwashing has become a ‘systemic problem’ among UK banks despite universal claims that sustainability is at the heart of their business, a new survey has found.
The study also demonstrates that banks are offsetting non-sustainable practices with carbon credits. Almost half (49%) of UK banks are investing in carbon credit schemes as the priority initiative, an increase from the 2021 Sustainable Banking Report.
The results come as another survey conducted by consultancy Kearney shows that that 40% of UK consumers would pay a 5-10% premium for a banking product if it was ESG. In fact, one in ten consumers would actually switch their banking provider if it didn’t provide a suitable sustainable banking product for them.
Similar pressure for change is coming from greater regulatory scrutiny of net zero targets and their implementation, combined with a tougher and more sophisticated approach from supervisors on climate-related financial risk.
Banking executives quizzed by Censuswide cite three barriers that need to be overcome in reaching true sustainability, including the lack of universally recognised regulation and enforcement (31%), cultural legacies that need to be shifted, budget implications and limited knowledge of the market (25%).
The Cenuswide data shows that 97% of UK banking executives say that ‘sustainable digitisation’ is the key to success. UK banks also believe in creating sustainable supply chains. Nine in ten banking executives said that they ensure their suppliers are compliant with current sector-specific sustainability expectations.
Peter-Jan Van De Venn, strategy director fintech, Mobiquity says: “While there has been some good progress on placing sustainable banking at the top of the boardroom agenda, the report shows that there is still an issue with banks saying and not doing. Greenwashing is an ongoing challenge for banks. They will only be able to protect their reputation if they fully optimise the execution of their sustainable initiatives. This can be achieved by harnessing sustainable digitisation combined with a robust ESG measurement framework to track impact.”
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