Financial institutions are at the forefront of a dynamic sustainability landscape as individuals seek ways to reduce their carbon footprint and embrace sustainable living. Banking leaders play a pivotal role in mobilizing finance for decarbonization efforts, aspiring to champion environmental causes by offering “green banking solutions.” These initiatives aim to combat climate change, accelerate the shift to clean energy, and achieve net-zero carbon emissions.
This move towards green banking not only aligns with the global call for sustainability but also enhances brand image and boosts ESG ratings. The strategy involves investing in and promoting renewable energies, as well as introducing financial products like “green bonds” and ESG investment tools to cater to environmentally-conscious customers.
The Customer Demand for Sustainability
Customers are increasingly seeking leadership from financial institutions in addressing climate change. According to the second annual BMO Climate Institute Business Leaders Survey:
- 68% of businesses leaders in North America continue to believe that financial institutions could play a role in helping companies become more climate friendly
- 77% of individuals and business leaders in North America are interested in the ability to generate insights on how they can adapt and thrive in an evolving climate landscape.
- 53% of North American SME’s chose the purchase of carbon credits to offset their emissions, up 6% from 2022, and an 8% increase in Canada alone.
- 74% are looking for an easier way to track greenhouse gas emissions
- 42% of consumers have already changed consumption habits themselves because of their stance on the environment and they would like to continue improving it with better information
This presents an opportunity for financial institutions to not only meet regulatory expectations but also create a competitive advantage by offering genuine sustainability solutions. But how can Financial Institutions identify these environmentally-conscious customers to engage them with specific insights about their footprint?
Strands Carbon Footprint Solution allows banks and financial institutions to analyze real-time transactions based on CO2 and economic parameters, to understand users’ lifestyle habits. This provides a deeper knowledge of your customer base, and identifies specific green attributes, to segment them in order to send personalized green insights and tailored advice about carbon footprint.
Avoiding Greenwashing and Building Engagement Integrating Sustainability
Trust with customers can only be gained through an authentic strategy for promoting environmental sustainability. Self-promotion without meaningful impact, such as greenwashing, can damage this trust. Environmentally friendly choices should be promoted by financial institutions and their customers should be educated about the impact of each option. The key is knowledge – if customers understand the real impact of their decisions, they are more likely to choose sustainably.
As an illustration, our solution empowers users to visualize their CO2 footprint across various categories, offering tailored recommendations on reducing it. This could involve actionable insights like transitioning to a sustainable electricity supplier or choosing to shop at a nearby eco-friendly store.
By harnessing transaction data, financial institutions have the opportunity to grasp customers’ financial aspirations and align sustainability initiatives with these goals within a gamified journey that allows users to compare them with their peers, increasing the adoption of digital channels.
Interacting with your customers through personalized carbon insights
Thanks to Strands CFI solution, banks and financial Institutions can not only recommend greener spending choices, suggest lower-carbon merchants, and offer personalized advice based on transaction data but also boosting cross-selling opportunities by promoting environmentally eco-friendly products and investments. This not only enhances customer engagement but also provides occasions to introduce new products and services, from savings accounts to ESG investments.
Sustainability, when embraced genuinely, becomes a winning situation. It’s not just a brand promise but a tangible commitment for all parties.
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