Report: Green Finance - UK - January 2008 TOC

Issues in the Market
Main findings of the research
Insights and Opportunities
A strong latent demand for green finance
Green finance can provide a route to high-net worth customers
' First, do no harm'
Banks need to convince consumers of their green sincerity
Ethical investments provide significant scope for growth
Market in Brief
Environmental issues have risen to the top of the global agenda
Green financial services cover a broad spectrum of initiatives
Ethical investment market is the most developed green sector
Trade perspective: trend to green finance is a genuine market shift
Mintel' s research findings: How Green are We?
Mintel' s research findings: Demand for Green Financial Services
Mintel' s research findings: Perceptions of current industry efforts
Mintel' s research findings: What do people want?
Market Environment
Key points
Green issues have risen to the top of the global agenda
Climate change is now viewed as the planet' s greatest challenge
Intense media coverage has increased consumer awareness
Politicians seem ready to tackle the environmental challenge
The Climate Change Bill has set out a legislative framework
The business world is increasingly taking a proactive role
Financial services has been at the forefront of green initiatives
ClimateWise further demonstrates this commitment
- Figure 1: Organisations that have endorsed the ClimateWise principles, 2008
Ethical consumerism within the UK continues to rise
- Figure 2: Total value of ethical consumerism in the UK, 1999-2006
Tax incentives could stimulate demand for green products
What Are Green Financial Services?
Key points
An increasing focus on green issues is evident in financial services
Green financial services cover a broad spectrum of initiatives
- Figure 3: Green financial services
There has been an expansion in the green product range
But there are still gaps within the green finance offering
Firms are keen to demonstrate their corporate green credentials
The basis of competition has focused on corporate policies
Internal issues need to be resolved before products are introduced
Some organisations have shown a particularly strong commitment
HSBC has taken steps to become a sustainable bank
Barclays is also demonstrating its ' green' commitment
Strengths and Weaknesses in the Market
Strengths
Weaknesses
Trade Perspective
Green issues continue to gain prominence within financial services
Business practices increasingly aim to minimise environmental impact
A variety of green financial products have been launched
Green financial services are becoming increasingly popular
The trend to green finance represents a genuine market shift
Firms must do more than ' green-wash' their existing products
Market Size
Key points
Consumers hold more than £13 billion in ethical forms of finance
- Figure 4: Ethical finance in the UK, 1999-2006
Ethical investments account for more than half of total funds
- Figure 5: Ethical finance in the UK, by product area, 1999-2006
The growth in ethical investments has continued in last 12 months
Companies and Products
Key points
Ethical investment market is the most developed green sector
More than 90 ethical funds available to investors
Three main approaches to ethical investing
Friends Provident remains the ethical investment market leader
The ethical banking sector is comparatively less developed
Co-operative Bank has demonstrated strong ethical credentials...
...and new products are being developed
Other specialist ' ethical' providers are also key players
The market benefits of green finance
Triodos and Charity banks also taking a harder line on ethics
A number of building societies have launched green mortgages...
...but most rely on offsetting
Some of the large banks are taking tentative ' green' steps
HSBC using green policies as a marketing tool...
...and the trend is set to continue
The insurance sector has been relatively slow to react
Some green insurance products have now been launched
Discounts for ' green' cars...
...and for climate-friendly housing
The insurance sector is set for further product innovation
The Consumer -- How Green are We?
Key points
Survey background
Most consumers now participate in at least one green activity
- Figure 6: Proportion of consumers that participate in green or ethical activities, November 2007
Implications
Women are more likely to undertake green activities than men
- Figure 7: Proportion of consumers that participate in green or ethical activities, by gender, November 2007
The 55-64s have been keen to embrace green consumerism...
- Figure 8: Proportion of consumers that participate in green or ethical activities, by age, November 2007
...but the young seem to be more talk than action
Implications
ABs tend to take part in a broad range of green activities
- Figure 9: Proportion of consumers that participate in green or ethical activities, by socio-economic group, November 2007
Implications
Dissecting the sample according to green and ethical deeds
- Figure 10: The green spectrum, November 2007
The boomers turning darker green
Cashing in on the environment
Bottling it?
Environment? What environment?
Green crusaders tend to own a broad range of financial products
- Figure 11: Ownership of selected financial products, by ' green' typologies, November 2007
The Consumer -- Demand for Green Financial Services
Key points
One in six consumers have already been swayed by green issues
- Figure 12: ' Taken ethical/environmental factors into account when choosing a financial provider' , November 2007
Implications
Green factors have influenced over a fifth of ABC1 35-54s
- Figure 13: ' Taken ethical/environmental factors into account when choosing a financial provider' , by gender, age and socio-economic group, November 2007
The ' well-educated' are more likely to value green credentials
- Figure 14: ' Taken ethical/environmental factors into account when choosing a financial provider' , by lifestage, income, ACORN group and age finished full-time education, November 2007
Green issues have influenced almost half of all Guardian readers
- Figure 15: ' Taken ethical/environmental factors into account when choosing a financial provider' , by TV region, newspaper readership and supermarket usage, November 2007
Three in ten consumers intend to take account of green issues
- Figure 16: ' Will take account of ethical/environmental factors when next arranging a financial product' , November 2007
Implications
The over-65s and DEs are less likely to consider green issues
- Figure 17: ' Will take account of ethical/environmental factors when next arranging a financial product' , by gender, age and socio-economic group, November 2007
A large minority in the Urban Prosperity group are set to go green
- Figure 18: ' Will take account of ethical/environmental factors when next arranging a financial product' , by lifestage, income, ACORN group and age finished full-time education, November 2007
Implications and Opportunities
Green issues will influence over four in ten Waitrose customers
- Figure 19: ' Will take account of ethical/environmental factors when next arranging a financial product' , by TV region, newspaper readership and supermarket usage, November 2007
A quarter of consumers would pay a premium for a ' green' bank
- Figure 20: ' Prepared to pay a little more to bank with a company with strong green credentials' , November 2007
Implications
A third of ABs would pay more to bank with a ' green' company
- Figure 21: ' Prepared to pay a little more to bank with a company with strong green credentials' , by gender, age and socio-economic group, November 2007
Almost four in ten students would pay more for a ' green' bank
- Figure 22: Prepared to pay a little more to bank with a company with strong green credentials' , by lifestage, income, ACORN group and age finished full-time education, November 2007
Most Guardian readers would pay a ' green' banking premium
- Figure 23: ' Prepared to pay a little more to bank with a company with strong green credentials' , by TV region, newspaper readership and supermarket usage, November 2007
Saving the world on the cheap
- Figure 24: Attitudinal groups based on demand for green financial services, by gender, age, socio-economic group, lifestage, income and TV region, November 2007
The Consumer -- Perceptions of Current Industry Efforts
Key points
Most consumers are interested in environmental issues
- Figure 25: ' All this talk about the environment just bores me' , November 2007
Implications
The vast majority of ABs declared an interest in green issues
- Figure 26: ' All this talk about the environment just bores me' , by gender, age and socio-economic group, November 2007
More than a third of low earners find the environment boring
- Figure 27: ' All this talk about the environment just bores me' , by lifestage, income, ACORN group and age finished full-time education, November 2007
The environment interests a large majority of broadsheet readers
- Figure 28: ' All this talk about the environment just bores me' , by TV region, newspaper readership and supermarket usage, November 2007
A large minority feel banks can make an environmental impact
- Figure 29: ' Banks can' t really make much difference to environmental issues' , November 2007
Implications
A majority of ABs think banks can help with environmental issues
- Figure 30: ' Banks can' t really make much difference to environmental issues' , by gender, age and socio-economic group, November 2007
Over half of high earners feel banks can make a difference
- Figure 31: ' Banks can' t really make much difference to environmental issues' , by lifestage, income, ACORN group and age finished full-time education, November 2007
Most Guardian readers think banks can help tackle green issues
- Figure 32: ' Banks can' t really make much difference to environmental issues' , by TV region, newspaper readership and supermarket usage, November 2007
A majority of consumers are cynical about banks' green efforts
- Figure 33: ' When banks talk about being green, I tend to think it' s a PR stunt' , November 2007
Implications
Three-quarters of ABs question the banking sector' s motivations
- Figure 34: ' When banks talk about being green, I tend to think it' s a PR stunt' , by gender, age and socio-economic group, November 2007
A large proportion of Wealthy Achievers doubt banks' integrity
- Figure 35: ' When banks talk about being green, I tend to think it' s a PR stunt' , by lifestage, income, ACORN group and age finished full-time education, November 2007
A large majority in South West/Wales and Ulster are cynics
- Figure 36: ' When banks talk about being green, I tend to think it' s a PR stunt' , by TV region, newspaper readership and supermarket usage, November 2007
Converted, sceptical, or fatalist?
- Figure 37: Attitudinal groups based on perceptions of current industry environmental efforts, by gender, age, socio-economic group, lifestage, income and TV region, November 2007
Banks can make a difference -- and they want to make a difference...
...or do they?
Is it even worth making the effort?
Or do we just not care?
The Consumer -- What Do People Want?
Key points
Consumers' key concerns focus on avoiding unethical practices...
- Figure 38: Green features that are important when choosing a financial provider, November 2007
...but there' s still scope to be proactive
Implications
The 35-44s are keen to avoid firms that invest in unethical areas
- Figure 39: Green features that are important when choosing a financial provider, by age, November 2007
A high proportion of ABs could be influenced by green features
- Figure 40: Green features that are important when choosing a financial provider, by socio-economic group, November 2007
Green features could sway a large proportion of mortgage holders...
- Figure 41: Green features that are important when choosing a financial provider, by selected financial product ownership groups, November 2007
...but investor priorities belie the growth of ethical funds
The ethical investment market has significant growth potential...
- Figure 42: Agreement with statements relating to ethical investments, November 2007
...but many haven' t even considered it
Implications
More than one in seven 35-54s feel ethical issues are important
- Figure 43: Agreement with statements relating to ethical investments, by age, November 2007
Making the most of their investment muscle
- Figure 44: Agreement with statements relating to ethical investments, by socio-economic group, November 2007
Unit trust holders are less likely to view ethical issues as key
- Figure 45: Agreement with statements relating to ethical investments, by selected financial product ownership groups, November 2007
Appendix -- Detailed Demographics
- Figure 46: Typologies based upon participation in green or ethical activities, by gender, age, socio-economic group, lifestage, income and TV region, November 2007

Green Finance - UK - January 2008

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