Cost of living vs ethical banking – you can, and should, have both
This editorial was featured in Finance Derivative.
Ravi Kumar, Senior Product Manager
Recent years have seen a growing number of young people place importance on ethics and sustainability across many aspects of their lives. From green energy, sustainable travel, to food waste, the banking industry is no different.
However, as the ongoing cost-of-living crisis sends energy bills soaring and inflation drives up the price of everyday goods, Gatehouse Bank commissioned research to find out whether attitudes towards ethical savings options have changed.
The survey revealed a generational divide, with almost two-thirds (65%) of people aged 18 to 24 noting that they would continue to opt for an ethical savings account despite the current economic climate. Respondents in this age group highlighted that this would remain the case even if the account offered lower returns than other less ethical alternatives. In contrast, only 27% of those aged 45 to 54, and less than a fifth (18%) of over-55s, placed more importance on their ethical commitments over financial returns.
More generally, the cost-of-living crisis has made it increasingly difficult for people to commit to their sustainable saving goals. Over one third (36%) of respondents noted that their willingness to pursue ethical savings options has fallen and will likely continue to do so as financial pressures increase.
Despite this, the attitudinal shift amongst younger generations is highly encouraging for financial services providers willing to place ethical products at the heart of their business practices. Where citizens decide to place their money has a measurable impact on the world we live in, so rising to the challenge and ensuring that they do not have to choose between market-leading returns and their own ethics should be front and centre for providers.
The latest generation of savers are the most ethically conscious yet. Younger customers’ passion to drive sustainable initiatives forwards demonstrates that finance and ethical values can, and should, work in tandem. It is therefore important for the banking industry to continue spreading awareness of non-traditional savings methods which offer customers the chance to secure high returns in a sustainable and ethical manner. Financial gains and ethical choices are not mutually exclusive, and finance providers must step up and provide options for savers who want to align their financial choices with their personal values, even in the current economic climate.
At Gatehouse Bank, we have designed our award-winning Woodland Saver Accounts with this in mind. These products aim to offer customers highly competitive rates while helping them to support the environment and mitigate carbon emissions. For every Woodland Saver account opened or renewed, we work with our partner, Forest Carbon, to plant a tree in a certified woodland project. To date, we have planted over 20,000 trees which are key in sequestering atmospheric carbon dioxide.
Banks and other financial providers should be doing all they can to promote responsible saving whilst ensuring the range of options available continues to grow. This is an industry-wide challenge, allowing banks the opportunity to meet the many and ever-changing needs of modern customers, especially during the current cost-of-living crisis and other economic pressures.