Table of Contents
Issues in the Market
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- Main findings of the research
Insights and Opportunities
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- A strong latent demand for green finance
- Green finance can provide a route to high-net worth customers
- ‘First, do no harm’
- Banks need to convince consumers of their green sincerity
- Ethical investments provide significant scope for growth
Market in Brief
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- Environmental issues have risen to the top of the global agenda
- Green financial services cover a broad spectrum of initiatives
- Ethical investment market is the most developed green sector
- Trade perspective: trend to green finance is a genuine market shift
- Mintel’s research findings: How Green are We?
- Mintel’s research findings: Demand for Green Financial Services
- Mintel’s research findings: Perceptions of current industry efforts
- Mintel’s research findings: What do people want?
Fast Forward Trends
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- Guiding Choice
- What's it about?
- Market touchpoints/implications
- Bottomless Vanity
- What's it about?
- Market touchpoints/implications
- Instant Gratification
- What's it about?
- Market touchpoints/implications
Market Environment
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- Key points
- Green issues have risen to the top of the global agenda
- Climate change is now viewed as the planet’s greatest challenge
- Intense media coverage has increased consumer awareness
- Politicians seem ready to tackle the environmental challenge
- The Climate Change Bill has set out a legislative framework
- The business world is increasingly taking a proactive role
- Financial services has been at the forefront of green initiatives
- ClimateWise further demonstrates this commitment
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- Figure 1: Organisations that have endorsed the ClimateWise principles, 2008
- Ethical consumerism within the UK continues to rise
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- Figure 2: Total value of ethical consumerism in the UK, 1999-2006
- Tax incentives could stimulate demand for green products
What Are Green Financial Services?
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- Key points
- An increasing focus on green issues is evident in financial services
- Green financial services cover a broad spectrum of initiatives
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- Figure 3: Green financial services
- There has been an expansion in the green product range
- But there are still gaps within the green finance offering
- Firms are keen to demonstrate their corporate green credentials
- The basis of competition has focused on corporate policies
- Internal issues need to be resolved before products are introduced
- Some organisations have shown a particularly strong commitment
- HSBC has taken steps to become a sustainable bank
- Barclays is also demonstrating its ‘green’ commitment
Strengths and Weaknesses in the Market
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- Strengths
- Weaknesses
Trade Perspective
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- Green issues continue to gain prominence within financial services
- Business practices increasingly aim to minimise environmental impact
- A variety of green financial products have been launched
- Green financial services are becoming increasingly popular
- The trend to green finance represents a genuine market shift
- Firms must do more than ‘green-wash’ their existing products
Market Size
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- Key points
- Consumers hold more than £13 billion in ethical forms of finance
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- Figure 4: Ethical finance in the UK, 1999-2006
- Ethical investments account for more than half of total funds
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- Figure 5: Ethical finance in the UK, by product area, 1999-2006
- The growth in ethical investments has continued in last 12 months
Companies and Products
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- Key points
- Ethical investment market is the most developed green sector
- More than 90 ethical funds available to investors
- Three main approaches to ethical investing
- Friends Provident remains the ethical investment market leader
- The ethical banking sector is comparatively less developed
- Co-operative Bank has demonstrated strong ethical credentials…
- …and new products are being developed
- Other specialist ‘ethical’ providers are also key players
- The market benefits of green finance
- Triodos and Charity banks also taking a harder line on ethics
- A number of building societies have launched green mortgages…
- …but most rely on offsetting
- Some of the large banks are taking tentative ‘green’ steps
- HSBC using green policies as a marketing tool…
- …and the trend is set to continue
- The insurance sector has been relatively slow to react
- Some green insurance products have now been launched
- Discounts for ‘green’ cars…
- …and for climate-friendly housing
- The insurance sector is set for further product innovation
The Consumer – How Green are We?
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- Key points
- Survey background
- Most consumers now participate in at least one green activity
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- Figure 6: Proportion of consumers that participate in green or ethical activities, November 2007
- Implications
- Women are more likely to undertake green activities than men
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- Figure 7: Proportion of consumers that participate in green or ethical activities, by gender, November 2007
- The 55-64s have been keen to embrace green consumerism…
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- Figure 8: Proportion of consumers that participate in green or ethical activities, by age, November 2007
- …but the young seem to be more talk than action
- Implications
- ABs tend to take part in a broad range of green activities
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- Figure 9: Proportion of consumers that participate in green or ethical activities, by socio-economic group, November 2007
- Implications
- Dissecting the sample according to green and ethical deeds
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- Figure 10: The green spectrum, November 2007
- The boomers turning darker green
- Cashing in on the environment
- Bottling it?
- Environment? What environment?
- Green crusaders tend to own a broad range of financial products
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- Figure 11: Ownership of selected financial products, by ‘green’ typologies, November 2007
The Consumer – Demand for Green Financial Services
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- Key points
- One in six consumers have already been swayed by green issues
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- Figure 12: ‘Taken ethical/environmental factors into account when choosing a financial provider’, November 2007
- Implications
- Green factors have influenced over a fifth of ABC1 35-54s
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- Figure 13: ‘Taken ethical/environmental factors into account when choosing a financial provider’, by gender, age and socio-economic group, November 2007
- The ‘well-educated’ are more likely to value green credentials
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- Figure 14: ‘Taken ethical/environmental factors into account when choosing a financial provider’, by lifestage, income, ACORN group and age finished full-time education, November 2007
- Green issues have influenced almost half of all Guardian readers
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- Figure 15: ‘Taken ethical/environmental factors into account when choosing a financial provider’, by TV region, newspaper readership and supermarket usage, November 2007
- Three in ten consumers intend to take account of green issues
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- Figure 16: ‘Will take account of ethical/environmental factors when next arranging a financial product’, November 2007
- Implications
- The over-65s and DEs are less likely to consider green issues
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- Figure 17: ‘Will take account of ethical/environmental factors when next arranging a financial product’, by gender, age and socio-economic group, November 2007
- A large minority in the Urban Prosperity group are set to go green
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- Figure 18: ‘Will take account of ethical/environmental factors when next arranging a financial product’, by lifestage, income, ACORN group and age finished full-time education, November 2007
- Implications and Opportunities
- Green issues will influence over four in ten Waitrose customers
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- Figure 19: ‘Will take account of ethical/environmental factors when next arranging a financial product’, by TV region, newspaper readership and supermarket usage, November 2007
- A quarter of consumers would pay a premium for a ‘green’ bank
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- Figure 20: ‘Prepared to pay a little more to bank with a company with strong green credentials’, November 2007
- Implications
- A third of ABs would pay more to bank with a ‘green’ company
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- Figure 21: ‘Prepared to pay a little more to bank with a company with strong green credentials’, by gender, age and socio-economic group, November 2007
- Almost four in ten students would pay more for a ‘green’ bank
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- Figure 22: Prepared to pay a little more to bank with a company with strong green credentials’, by lifestage, income, ACORN group and age finished full-time education, November 2007
- Most Guardian readers would pay a ‘green’ banking premium
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- Figure 23: ‘Prepared to pay a little more to bank with a company with strong green credentials’, by TV region, newspaper readership and supermarket usage, November 2007
- Saving the world on the cheap
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- Figure 24: Attitudinal groups based on demand for green financial services, by gender, age, socio-economic group, lifestage, income and TV region, November 2007
The Consumer – Perceptions of Current Industry Efforts
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- Key points
- Most consumers are interested in environmental issues
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- Figure 25: ‘All this talk about the environment just bores me’, November 2007
- Implications
- The vast majority of ABs declared an interest in green issues
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- Figure 26: ‘All this talk about the environment just bores me’, by gender, age and socio-economic group, November 2007
- More than a third of low earners find the environment boring
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- Figure 27: ‘All this talk about the environment just bores me’, by lifestage, income, ACORN group and age finished full-time education, November 2007
- The environment interests a large majority of broadsheet readers
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- Figure 28: ‘All this talk about the environment just bores me’, by TV region, newspaper readership and supermarket usage, November 2007
- A large minority feel banks can make an environmental impact
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- Figure 29: ‘Banks can’t really make much difference to environmental issues’, November 2007
- Implications
- A majority of ABs think banks can help with environmental issues
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- Figure 30: ‘Banks can’t really make much difference to environmental issues’, by gender, age and socio-economic group, November 2007
- Over half of high earners feel banks can make a difference
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- Figure 31: ‘Banks can’t really make much difference to environmental issues’, by lifestage, income, ACORN group and age finished full-time education, November 2007
- Most Guardian readers think banks can help tackle green issues
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- Figure 32: ‘Banks can’t really make much difference to environmental issues’, by TV region, newspaper readership and supermarket usage, November 2007
- A majority of consumers are cynical about banks’ green efforts
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- Figure 33: ‘When banks talk about being green, I tend to think it's a PR stunt’, November 2007
- Implications
- Three-quarters of ABs question the banking sector’s motivations
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- Figure 34: ‘When banks talk about being green, I tend to think it's a PR stunt’, by gender, age and socio-economic group, November 2007
- A large proportion of Wealthy Achievers doubt banks’ integrity
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- Figure 35: ‘When banks talk about being green, I tend to think it's a PR stunt’, by lifestage, income, ACORN group and age finished full-time education, November 2007
- A large majority in South West/Wales and Ulster are cynics
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- Figure 36: ‘When banks talk about being green, I tend to think it's a PR stunt’, by TV region, newspaper readership and supermarket usage, November 2007
- Converted, sceptical, or fatalist?
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- Figure 37: Attitudinal groups based on perceptions of current industry environmental efforts, by gender, age, socio-economic group, lifestage, income and TV region, November 2007
- Banks can make a difference – and they want to make a difference…
- …or do they?
- Is it even worth making the effort?
- Or do we just not care?
The Consumer – What Do People Want?
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- Key points
- Consumers’ key concerns focus on avoiding unethical practices…
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- Figure 38: Green features that are important when choosing a financial provider, November 2007
- …but there’s still scope to be proactive
- Implications
- The 35-44s are keen to avoid firms that invest in unethical areas
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- Figure 39: Green features that are important when choosing a financial provider, by age, November 2007
- A high proportion of ABs could be influenced by green features
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- Figure 40: Green features that are important when choosing a financial provider, by socio-economic group, November 2007
- Green features could sway a large proportion of mortgage holders…
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- Figure 41: Green features that are important when choosing a financial provider, by selected financial product ownership groups, November 2007
- …but investor priorities belie the growth of ethical funds
- The ethical investment market has significant growth potential…
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- Figure 42: Agreement with statements relating to ethical investments, November 2007
- …but many haven’t even considered it
- Implications
- More than one in seven 35-54s feel ethical issues are important
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- Figure 43: Agreement with statements relating to ethical investments, by age, November 2007
- Making the most of their investment muscle
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- Figure 44: Agreement with statements relating to ethical investments, by socio-economic group, November 2007
- Unit trust holders are less likely to view ethical issues as key
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- Figure 45: Agreement with statements relating to ethical investments, by selected financial product ownership groups, November 2007
Appendix – Detailed Demographics
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- Figure 46: Typologies based upon participation in green or ethical activities, by gender, age, socio-economic group, lifestage, income and TV region, November 2007
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