Across the Asia-Pacific (APAC) region, sustainable financial services are growing in popularity with consumers. But despite the growing demand for greener and more sustainable products, skepticism remains about how strongly banks are committed to their sustainability agenda.
That’s according to a new global survey by banking software company Mambu, which surveyed 6,000 consumers to understand their attitudes towards green finance, their expectations of financial institutions and the types of sustainable products and services they would like to consume.
In Asia-Pacific, results show that consumers are changing their buying behavior to become more sustainable, indicating that environmental, social and governance (ESG) considerations are increasingly dominating many of their investment decisions.
Among respondents surveyed across the region, 31% said they had knowingly done business with a sustainable financial institution or used a sustainable banking product or service, a figure slightly higher than the global average of 29%.
A breakdown by country shows that consumers in Thailand (43%), along with Vietnam (43%), are the biggest adopters of sustainable finance, followed by Malaysia (30%) and Singapore (27%) .
In these four jurisdictions, the vast majority of green finance customers say they are more satisfied with green financial services than with traditional banking services (93% in Vietnam; 88% in Thailand; 81% in Malaysia; and 79% in Singapore) .
The results also show that providing green and sustainable financial products and services is becoming a prerequisite for banking institutions, with 66% of consumers in Vietnam, 65% in Thailand, 61% in Malaysia and 50% in Singapore saying that availability of green products financial services have become more important to them over the past five years.
The trends observed at the regional level are consistent with the global figures. Globally, nearly two-thirds (63%) of consumers said they would like the basic financial services they use to be sustainable, and 60% said they would like every financial service they use they use be durable.
Going even further, nearly half (49%) said they would be willing to ditch their current bank for a provider more committed to sustainability.
But despite a clear propensity for products and services with positive social and environmental impacts, consumers have also shown skepticism and distrust, with more than two-thirds (67%) of global consumers believing their current bank is guilty of greenwashing. , a concept that refers to the practice of deceptively persuading the public that an organization’s products, goals, and policies are environmentally friendly.
Growing concerns about deceptive practices in Asia have prompted public agencies and industry players to introduce standards and rules.
In Singapore, the Singapore Stock Exchange announced in December 2021 that it would continue with its plans to require issuers to provide reports and climate disclosures regarding board diversity from the financial year commencing. in 2022.
Similarly in India, the Securities and Exchange Board of India (SEBI) issued a circular in May 2021 implementing new sustainability-related reporting requirements for the top 1,000 listed companies by market capitalization.
Hong Kong has also mandated financial institutions and listed companies to disclose the financial impact of climate change on their businesses by 2025.
ESG investing rose sharply in Asia in 2021, with flows to ESG funds more than doubling to over $100 billion, according to data from Morgan Stanley.
Featured image credit: edited from Freepik