Asian financial sector lacks sustainability leaders: study | News | Eco-Enterprise

Asian and global banks and financial services firms operating in the region have communicated their sustainability credentials more aggressively than any other industry in recent years, but consumers are skeptical of their ability to help economies. Asia’s emerging economies to move towards a more sustainable future, according to a study by media company BBC.

The week after a high-profile report sounded the alarm about Asia’s vulnerability to climate change, the BBC’s study of 1,271 consumers in Asia-Pacific (APAC) found that People want financial services companies to play a more active role in supporting more environmental and socially sustainable economies, but the sector seems to lack sustainability leadership. Only 9% of consumers believe that financial entities are leaders in terms of sustainable development.

Only 14% of consumers in the region believe that banks and financial services companies understand the need to support sustainable development, and only 11% believe that they support environmentally and socially responsible development in emerging economies.

Only 14% believe that financial actors support large companies in their sustainable development practices, and even fewer believe that they help small and medium-sized enterprises (12%) or communities (10%) to adopt sustainable practices.

Companies in the study include Indian bank ICICI, British financial services company Standard Chartered Bank, Japanese financial group Mitsubishi UFJ, US entities such as American Express, Visa, Mastercard and Japanese insurer Mitsui Sumitomo Insurance Group Holdings.

Consumer research in countries such as Australia, India, China, Malaysia, Vietnam and Singapore found that people have low trust in financial services companies and their development commitments sustainable compared to the confidence they have in other sectors, such as automotive and technology.

They are also less likely to expect financial entities to adopt sustainable working practices that can reduce damage to the planet and waste of resources. Automotive and tech brands edged out the financial sector with 87% and 79% of respondents, respectively, believing they will implement eco-friendly policies in their processes and workplace, compared to 60% of consumers who expect the same with financial companies.

They are also far less aware of financial brands’ sustainability efforts, despite a study by analytics firm GlobalData in May showing that Asian financial services companies communicated sustainability in corporate documents more strongly than any other industry. of the region in the era of Covid-19. Some 63% of APAC consumers surveyed were unaware of financial brands’ sustainability portfolios.

The BBC study also highlighted the dangers of greenwashing – which gives the false impression of how a company’s products are more environmentally friendly than they actually are – to the credibility of the brand. While 81% of respondents said they agreed that clearly demonstrating a commitment to sustainability adds value to a brand, more than half (57%) said they would stop buying a product they were previously loyal to if they found out it wasn’t true. its commitments to sustainable development.

In January, a group of investors worth $2.4 trillion said they suspected HSBC of greenwashing, because the bank continues to finance coal projects despite its commitment to becoming carbon neutral. Japan’s biggest banks, including MUFG, Sumitomo Mitsui Financial Group and Mizuho, ​​have rolled out high-profile climate action pledges over the past two years but continue to draw criticism for coal power financing in developing countries.

Over the past five years, no Asia-Pacific company has talked about sustainability more than Bank Rakyat Indonesia (BRI), Indonesia’s largest state-owned bank, according to research by GlobalData, but BRI is l ‘one of the country’s largest charcoal financiers and has been flagged as a deforestation risk due to its funding of commodities such as palm oil.

The study found that 79% of APAC consumers say sustainable practices and commitments are an important consideration when making purchasing decisions, and 68% are happy to pay more for brands with a strong sustainability and environmentally friendly practices.

Comments are closed.