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Economy

Green investment gap

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Despite financial institutions readily backing green investment—as exemplified by Wells Fargo’s $30 billion announcement—governments are failing to see the long-term picture and fast losing a grip on the future.

Wells Fargo, a community-based financial services company with $1.3 trillion in assets, announced on April 23 its enhanced commitment to environmental leadership in the form of $30 billion in loans and investments to support a greener economy by 2020.

Wells Fargo chairman, president and CEO John Stumpf said, “Our commitment to the environment reflects our belief that Wells Fargo’s responsibility as a corporation goes beyond its mission of helping customers succeed financially. We also have a major role to play in promoting the long-term economic prosperity and quality of life of the communities we serve.

By bringing our talents and resources to these efforts, we seek to work jointly with businesses and communities in protecting and preserving this planet and its precious resources for future generations.”

And Wells Fargo is not placing such a large bet on pure whimsicality. They have picked up on a growing trend in consumer thinking.

Our research shows more than 80% of our consumers think environmental issues are important”, said Mary Wenzel, Wells Fargo’s director of environmental affairs.

We share their values and concerns and are acting on them through a broad-based, financially powerful approach to the environmental opportunities and needs we see on the horizon. We hope to demonstrate that progress for Wells Fargo and for the communities we serve does not have to come at the expense of the planet we share.”

It is a hugely satisfying standpoint backed by an incredibly strong set of commitments over the next eight years. Besides stumping up $30 billion for wind and solar energy, clean technologies, energy efficient buildings and environmentally responsible public financing, the bank also plans to reduce the impact of its own operations, including a 40% increase in energy efficiency and 65% waste diversion.

The banking giant also acknowledged the importance of accountability and transparency in its supply chain—an issue of increasing concern as global issues threaten companies beyond their traditional borders.

Indeed, following a recent Eurosif Procurement Theme Report, executive director François Passant noted, “As supply chains are getting more and more complex, investors are increasingly scrutinizing how companies manage the risks related to the different tiers of suppliers. A particular focus should be placed on environmental and social risks as these can have direct reputational and financial impacts”.

The positive announcement comes at a time when the mainstream banking and financial sector is under great scrutiny and follows recent news that sustainable banks are outperforming their traditional counterparts.

On the other side of the rather large coin, is the severe myopia at governmental level on the very same concept—a greener economy.

An Ernst & Young report released ahead of the Durban Climate Change Conference at the end of 2011—Durban Dynamics: navigating for progress on climate change—revealed that European governments were failing to meet commitments in carbon emissions targets and green investment because of self-inflicted, short-term austerity measures.

Sadly, this mindset been magnified by the UK government of late through an environmentally shy budget and prime minister David Cameron shrinking from his mission to lead the “greenest government ever”.

It is not unusual for the private sector to take the lead and recognise the financial implications of global issues ahead of slow moving governments. But a continued “business-as-usual” approach has dangerous implications not only for the planet as climate change is pushed further down the agenda but also for continued prosperity.

Opting for short-term financial rewards instead of focusing resources and investment on driving a greener economy will cost us dear on many levels in the not too distant future.

Though initiatives such as the Green Investment Bank are a nice gesture, sustainable investment must be the keystone of government policy and not simply a fair-weather, good-times election winner.

Further reading:

Guide to Sustainable Investment

Sustainable banks outperforming mainstream counterparts

An unsustainable budget

EU urged towards a green, sustainable economy

Economy

Report: Green, Ethical and Socially Responsible Finance

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“The level of influence that ethical considerations have over consumer selection of financial services products and services is minimal, however, this is beginning to change. Younger consumers are more willing to pay extra for products provided by socially responsible companies.” Jessica Morley, Mintel’s Financial Services Analyst.

Consumer awareness of the impact consumerism has on society and the planet is increasing. In addition, the link between doing good and feeling good has never been clearer. Just 19% of people claim to not participate in any socially responsible activities.

As a result, the level of attention that people pay to the green and ethical claims made by products and providers is also increasing, meaning that such considerations play a greater role in the purchasing decision making process.

However, this is less true in the context of financial services, where people are much more concerned about the performance of a product rather than green and ethical factors. This is not to say, however, that they are not interested in the behaviour of financial service providers or in gaining more information about how firms behave responsibly.

This report focuses on why these consumer attitudes towards financial services providers exist and how they are changing. This includes examination of the wider economy and the current structure of the financial services sector.

Mintel’s exclusive consumer research looks at consumer participation in socially responsible activities, trust in the behaviour of financial services companies and attitudes towards green, ethical and socially responsible financial services products and providers. The report also considers consumer attitudes towards the social responsibilities of financial services firms and the green, ethical and socially responsible nature of new entrants.

There are some elements missing from this report, such as conducting socially responsible finance with OTC trading. We will cover these other topics in more detail in the future. You can research about Ameritrade if you want to know more ..

By this report today: call: 0203 416 4502 | email: iainooson[at]mintel.com

Report contents:

OVERVIEW
What you need to know
Report definition
EXECUTIVE SUMMARY
The market
Ethical financial services providers: A question of culture
Investment power
Consumers need convincing
The transformative potential of innovation
Consumers can demand change
The consumer
For financial products, performance is more important than principle
Competition from technology companies
Financial services firms perceived to be some of the least socially responsible
Repaying the social debt
Consumer trust is built on evidence
What we think
ISSUES AND INSIGHTS
Creating a more inclusive economy
The facts
The implications
Payments innovation helps fundraising go digital
The facts
The implications
The social debt of the financial crisis
The facts
The implications
THE MARKET – WHAT YOU NEED TO KNOW
Ethical financial services providers: A question of culture
Investment power
Consumers need convincing
The transformative potential of innovation
Consumers can demand change
PUTTING FINANCIAL SERVICES IN AN ETHICAL CONTEXT
An ethical economy
An ethical financial sector
Ethical financial services providers
GREEN, ETHICAL AND SOCIALLY RESPONSIBLE ISSUES IN FINANCIAL SERVICES
The role of investing
Divestment
The change potential of pensions
The role of trust
Greater transparency informs decisions
Learning from past mistakes
The role of innovation
Payments innovation: Improving financial inclusion
Competition from new entrants
The power of new money
The role of the consumer
Consumers empowered to make a change
Aligning products with self
THE CONSUMER – WHAT YOU NEED TO KNOW
For financial products, performance is more important than ethics
Financial services firms perceived to be some of the least socially responsible
Competition from technology companies
Repaying the social debt
Consumer trust is built on evidence
Overall trust levels are high
THE ETHICAL CONSUMER – SOCIALLY RESPONSIBLE ACTIVITIES
Payments innovation can boost charitable donations
Consumer engagement in socially responsible activities is high
Healthier finances make it easier to go green
SOCIALLY RESPONSIBLE COMPANIES
37% unable to identify socially responsible companies
Building societies seen to be more responsible than banks….
….whilst short-term loan companies are at the bottom of the pile
CONSUMER TRUST IN THE BEHAVIOUR OF FINANCIAL SERVICES COMPANIES
Overall trust levels are high
Tax avoidance remains a major concern
The divestment movement
Nationwide significantly more trusted
Trust levels remain high
CONSUMER ATTITUDES TOWARDS GREEN AND ETHICAL FINANCIAL PRODUCTS
For financial products, performance is more important than principle
Socially conscious consumers are more concerned
CONSUMER ATTITUDES TOWARDS TRANSPARENCY
Strategy reports provide little insight for consumers
Lack of clarity regarding corporate culture causes concern
Consumers want more information
THE ROLE OF FINANCIAL SERVICES FIRMS IN SOCIETY
The social debt of the financial crisis
THE SOCIAL RESPONSIBILITIES OF FINANCIAL SERVICES FIRMS
For consumers, financial services firms play larger economic role
Promoting financial responsibility
CHALLENGER COMPANIES AND SOCIAL RESPONSIBILITY
Consumer trust is built on evidence
The alternative opportunity
The target customer

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Economy

A Good Look At How Homes Will Become More Energy Efficient Soon

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energy efficient homes

Everyone always talks about ways they can save energy at home, but the tactics are old school. They’re only tweaking the way they do things at the moment. Sealing holes in your home isn’t exactly the next scientific breakthrough we’ve been waiting for.

There is some good news because technology is progressing quickly. Some tactics might not be brand new, but they’re becoming more popular. Here are a few things you should expect to see in homes all around the country within a few years.

1. The Rise Of Smart Windows

When you look at a window right now it’s just a pane of glass. In the future they’ll be controlled by microprocessors and sensors. They’ll change depending on the specific weather conditions directly outside.

If the sun disappears the shade will automatically adjust to let in more light. The exact opposite will happen when it’s sunny. These energy efficient windows will save everyone a huge amount of money.

2. A Better Way To Cool Roofs

If you wanted to cool a roof down today you would coat it with a material full of specialized pigments. This would allow roofs to deflect the sun and they’d absorb less heat in the process too.

Soon we’ll see the same thing being done, but it will be four times more effective. Roofs will never get too hot again. Anyone with a large roof is going to see a sharp decrease in their energy bills.

3. Low-E Windows Taking Over

It’s a mystery why these aren’t already extremely popular, but things are starting to change. Read low-E window replacement reviews and you’ll see everyone loves them because they’re extremely effective.

They’ll keep heat outside in summer or inside in winter. People don’t even have to buy new windows to enjoy the technology. All they’ll need is a low-E film to place over their current ones.

4. Magnets Will Cool Fridges

Refrigerators haven’t changed much in a very long time. They’re still using a vapor compression process that wastes energy while harming the environment. It won’t be long until they’ll be cooled using magnets instead.

The magnetocaloric effect is going to revolutionize cold food storage. The fluid these fridges are going to use will be water-based, which means the environment can rest easy and energy bills will drop.

5. Improving Our Current LEDs

Everyone who spent a lot of money on energy must have been very happy when LEDs became mainstream. Incandescent light bulbs belong in museums today because the new tech cut costs by up to 85 percent.

That doesn’t mean someone isn’t always trying to improve on an already great invention. The amount of lumens LEDs produce per watt isn’t great, but we’ve already found a way to increase it by 25 percent.

Maybe Homes Will Look Different Too

Do you think we’ll come up with new styles of homes that will take off? Surely it’s not out of the question. Everything inside homes seems to be changing for the better with each passing year. It’s going to continue doing so thanks to amazing inventors.

ShutterStock – Stock photo ID: 613912244

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