Greenwashing has emerged as a significant challenge for UK banks, despite their widespread claims of prioritizing sustainability. A recent survey conducted by Censuswide, which included responses from 150 UK banking executives, reveals a stark contrast between rhetoric and reality. While all respondents affirm that sustainability is a crucial element of their business strategy, only 59% are actively measuring their environmental impact as part of their sustainability goals.
The study highlights a troubling trend where nearly half (49%) of UK banks are resorting to carbon credit schemes to counteract their non-sustainable practices, marking an increase from findings in the 2021 Sustainable Banking Report.
Additionally, a separate survey by consultancy Kearney shows that consumer demand for sustainable banking is on the rise, with 40% of UK consumers willing to pay a 5-10% premium for environmentally and socially responsible banking products. Alarmingly, 10% of consumers indicated they would consider changing their banking provider if their current one fails to offer adequate sustainable options.
This push for genuine change is further fueled by increasing regulatory scrutiny surrounding net-zero targets and a more rigorous approach from financial supervisors regarding climate-related risks.
Among the executives surveyed by Censuswide, three primary barriers to achieving true sustainability were identified: the absence of universally recognized regulations (31%), cultural challenges that necessitate an evolution (25%), and financial constraints coupled with limited market understanding.
Interestingly, 97% of those interviewed believe that "sustainable digitization" will play a pivotal role in their success. Furthermore, nine out of ten banking executives assert that they ensure their suppliers meet existing sustainability expectations specific to the sector.
Peter-Jan Van De Venn, Strategy Director at Mobiquity, commented, “Although there’s been notable progress in positioning sustainable banking as a key priority, this report underscores the persistent disconnect between claims and actions. Greenwashing remains a significant obstacle for financial institutions. To safeguard their reputations, banks must fully realize their sustainable initiatives, leveraging sustainable digitization alongside a comprehensive ESG measurement framework to assess impact.”
For those interested, Finextra will host its fifth Sustainable Finance Live conference and hackathon on November 29. To learn more and register for this event, please visit the event page here.