Economy
Half of financial consumers would ditch providers for unethical activities
Around half of all customers of all financial products and services would consider switching providers if they learned their money was being used unethically, a new poll has revealed.
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The survey, commissioned by responsible investment research firm EIRIS, found that consumers are almost as put off by providers that act irresponsibly or unethically as by providers that offer poor value deals or bad customer service.
Some 51% of respondents said they would switch providers if they felt their financial activities, such as lending or insuring, is contributing to activities such as human rights abuses or child labour.
Likewise, 56% of respondents that have taken out an investment product or pension said they would be willing to take action to lobby financial institutions to invest more ethically.
“We believe the findings from this year’s survey show that corporate performance on environmental, social, governance and ethical grounds can have a strong effect on how consumers feel about their bank or wealth manager,” said Stephen Hine, head of responsible investment development at EIRIS.
“Leading financial product providers need to continue to develop responsible investment and lending policies, and to develop appropriate products for this growing market.
“This will enable providers to manage risks and make the most of opportunities from the links between reputation, responsible or ethical concerns and consumer attitudes.”
In recent months, concern has particularly grown over the finance channeled into the fossil fuel industry. A growing global fossil fuel divestment movement has emerged to call on investors to ditch carbon-intensive holdings because of the grave environmental impact such companies have.
A recent Intergovernmental Panel on Climate Change’s (IPCC) report concluded that carbon-intensive energy production is the single biggest contributor to global warming.
Despite warnings that 80% of known fossil fuel reserves already identified must never be used if dangerous climate tipping points are to be avoided, energy companies continue to search for new reserves.
Some 32% of those polled in the EIRIS study said that they would not approve of their finance provider or investment manager investing in a fossil fuel firm.
This follows a separate survey that found 39% of Britons are concerned about their savings and investments being used to fund fossil fuels, while 36% said they would want their bank to stop investing in the sector.
Ethical banking reform group Move Your Money this week launched a divestment campaign specifically targeting the UK’s high street banks.
“Fossil fuel investment has never been environmentally acceptable. It is now no longer socially acceptable,” said Charlotte Webster, campaign director at Move Your Money.
“People’s everyday savings and investments are ultimately being used by banks to fund climate change, something we’ve found the public simply don’t want.”
Photo: Images of Money via Flickr
Further reading:
Fossil fuel divestment campaign targets high street banks
Positive investment market grows to £3.25 billion
Good Money Week: ‘Finance affects everybody’
Good Money Week: Barchester Green names top five ethical funds