How banks can drive financial and environmental transformation

The climate crisis is becoming increasingly difficult to ignore. Just last month, the UN 2024 Emissions Gap Report revealed that our opportunity to limit global warming to the safer target set out under the Paris Agreement (1.5C) will be almost impossible if we do not make significant changes. Given this backdrop - alongside the daily reports of devastating floods, wildfires and heat waves - it’s hardly surprising that people are growing increasingly wary. 

Tired of empty pledges and watered-down commitments from traditional leaders, many are looking for new ways to take action and make the positive changes they so desperately want to see from governments and business leaders. However, putting these good intentions into practice is often easier said than done, and many are now struggling to balance climate action while being mindful of their finances. 

The intention - action gap 

In our recent research, we asked UK consumers what steps they could realistically take in the next 12 months to make more sustainable choices, considering both their time and finances. The findings were stark - with just 12% able to consider making their finances greener, even less (10%) able to look at ways to invest and save sustainably. 

With the rising cost of living crisis, it’s understandable that people are prioritising managing their everyday finances over making more climate-conscious choices. In fact, according to ONS data, since 2021, UK households have significantly reduced their spending across everyday items such as meat and bread.   

Beyond this difficult economic backdrop, other factors are also hindering people’s ability to take positive climate action despite positive intentions to do so - with 37% saying they want to take steps to address the climate crisis but don’t know where to begin. 

How banks can bridge the divide

With a lack of guidance from traditional leaders and consumers calling out for support, banks have a unique opportunity to step up and fill the leadership void - not only ensuring customers can better manage their finances, but also live more sustainably. 

From green savings accounts and eco-friendly mortgages, to tools that can help track their carbon footprint, banks have a range of products and resources available to help consumers on this journey.  

More than this, as the next generation of banking customers come to the fore, these services will be vital if banks are to remain relevant in an increasingly competitive marketplace.  

This was made abundantly clear by our research, which found that two thirds (67%) of 18 to 34-year-olds want to save more money and prioritise living more sustainably, and a further 69% are worried about how climate change will impact their quality of life.  

By helping this generation understand how they can improve their financial wellbeing and make climate conscious decisions simultaneously, banks will demonstrate that they share this group’s values - helping to instil an important sense of loyalty among this growing customer base. 

As this generation’s choices will ultimately shape the future of our planet, banks will play a key role in empowering younger people to make sustainable choices that benefit people, planet and pocket. 

The bottom line 

Addressing the climate crisis demands action from individuals and institutions alike. Banks have an unprecedented opportunity to bridge the gap between financial wellbeing and environmental action, empowering individuals to make more informed, responsible choices. 

As consumers look to trusted institutions to lead the way, banks that step up and take on this challenge now will forge stronger connections with their customers, positioning themselves as champions of sustainability. In doing so, they will contribute to a future that’s not only financially secure but environmentally resilient for generations to come.