Across Asia-Pacific (APAC), sustainable finance services are growing in popularity among consumers. But despite rising demand for greener and more sustainable products, skepticism remains over how strongly banks are committed to their sustainability agenda.

This is according to a new global survey conducted by banking software company Mambu, which polled 6,000 consumers to understand their attitudes to green finance, their expectations of financial institutions and the types of sustainable products and services they’d like to consume.

In APAC, results show that consumers are shifting their purchase behavior to become more sustainable, indicating that environmental, social and governance (ESG) considerations are increasingly coming to dominate many of their investment decisions.

Of the respondents polled across the region, 31% indicated having knowingly banked with a sustainable finance institution or made use of a sustainable banking product or service, a figure that stands a little bit higher than the global average of 29%.

A breakdown by nation shows that consumers in Thailand (43%), as well as Vietnam (43%), are the biggest adopters of sustainable finance, followed by Malaysia (30%) and Singapore (27%).

In all four of these jurisdictions, the vast majority of green finance customers said they were more satisfied with green financial services compared to traditional banking services (93% in Vietnam; 88% in Thailand; 81% in Malaysia; and 79% in Singapore).

Results also show that providing green and sustainable financial products and services is becoming a prerequisite for banking institutions, with 66% of consumers in Vietnam, 65% in Thailand, 61% in Malaysia, and 50% in Singapore, stating that the availability of green financial services has become more important to them in the last five years.

Trends observed regionally are consistent with global figures. Globally, almost two-thirds (63%) of consumers said they would like the core financial services they use to be sustainable, and 60% said they would like every financial service they use to be sustainable.

Going even further, nearly half (49%) said they would be willing to ditch their current bank for a provider with a stronger commitment to sustainability.

But despite a clear inclination towards products and services with positive social and environmental impacts, consumers also manifested skepticism and mistrust, with over two-thirds (67%) of global consumers believing that their current bank is guilty of greenwashing, a concept that refers to the practice of deceptively persuading the public that an organization’s products, aims and policies are environmentally friendly.

Rising concerns over deceitful practices in Asia have pushed public agencies and industry participants to introduce standards and rules.

In Singapore, the Singapore Exchange announced in December 2021 that it will proceed with plans to require issuers to provide climate-related reporting and disclosures on board diversity from the financial year commencing 2022.

Similarly in India, the Securities and Exchange Board of India (SEBI) issued in May 2021 a circular implementing new sustainability-related reporting requirements for the top 1,000 listed companies by market capitalization.

Hong Kong, too, has mandated financial institutions and listed companies to disclose the financial impact of climate change on their businesses by 2025.

ESG investing has grown strongly in Asia in 2021, with flows into ESG funds more than doubling to over US$100 billion, data from Morgan Stanley show.

Featured image credit: Edited from Freepik