Louise O’Mahony
Head of Sustainable Banking, Banking & Payments Federation Ireland (BPFI)
Sustainable finance is key to the transition to a green economy, and customers must remain at the forefront to ensure no one is left behind on the climate journey.
Ireland and the EU have set ambitious targets to reduce greenhouse gas emissions by over 50% within this decade. A key principle underpinning these targets is to shift capital towards economic activities that contribute to the reduction of emissions and transition to a green economy.
Banks provide support through sustainable finance
Banks now play a vital role in supporting the transition through sustainable finance and are actively involved in financing renewable energy projects and those supporting natural capital. Given their direct relationships with customers in the real economy, banks also incentivise consumers with products such as sustainability-linked loans and reduced rates for mortgaged properties with improved energy performances.
Consumers want to ‘go green’
Sustainability research published by Banking & Payments Federation Ireland (BPFI) earlier this year, indicates that the majority of consumers want to ‘go green’ and make more sustainable finance and purchasing choices. For example, 53% of adults said that a good Building Energy Rating (BER) was very important when deciding on a property to purchase. Moreover, 58% of adults agreed that it is important that their savings and investments do not fund economic activities that have a negative impact on the planet.
Banks now play a vital role in supporting
the transition through sustainable finance.
However, the research also revealed that sustainable intentions are often outweighed by factors, such as cost and other practicalities. For example, less than a third of those planning to buy a car in the next year will be influenced by fuel emissions, compared to four out of five people being influenced by price.
No one left behind on the climate journey
These findings suggest opportunities to better align customer interest in sustainable options with the wide range of products offered by banks and financial providers. This includes sustainability-linked loans and reduced rates for mortgaged properties with improved energy performances.
Banks are also training frontline staff and relationship managers to help educate customers on the benefits of sustainable products. Customers must remain front and centre in discussions around financing the transition to a greener economy to ensure no one is left behind on the climate journey.
