British public willing to switch banks over poor environmental and social investments
The majority of the UK public wants greater information on the social and environmental impacts of banking decisions, with many willing to switch banks if they were found to be investing in fossil fuels.
ShareAction’s recent poll revealed the British public’s concern over their financial providers’ investment practices, prompting calls for institutional investors to limit financing for companies with adverse environmental impacts.
The survey reveals that 38% of British adults would likely change banks if their bank invested in fossil fuel-intensive companies, while 32% would be less inclined to switch if their bank invested in net-zero carbon emission companies.
Additionally, 54% of the respondents would consider switching banks if their bank invested in businesses with inadequate labour and human rights standards.
Almost three-quarters (73%) desired greater consideration for the social and environmental impact of investments, alongside financial returns.
More than half (52%) expressed interest in knowing more about their financial service providers’ investments, yet the majority (83%) admitted knowing little or nothing about where their money is invested.
ShareAction’s head of the banking programme Jeanne Martin said: “It’s clear that the public has a strong moral compass when it comes to how their money is being invested.
“We need to see banks step up and use their influence as financiers to steer companies away from practices that are violating human rights, damaging our vital ecosystems and escalating the climate crisis.”
In 2022, the world’s 60 largest banks offered $150bn to the top 100 companies involved in fossil fuel expansion, according to the latest Banking on Climate Chaos report.
Guidance on ‘responsible investment’
The survey was conducted in conjunction with the introduction of ShareAction’s new definition of ‘responsible investment’, seeking to enhance standards within the financial industry to combat greenwashing and deceptive assertions.
Earlier this month, ShareAction committed to releasing a set of technical documents providing guidance on establishing net-zero emissions targets to assist asset managers in adopting and implementing the new definition.
The first guidance manual has set out five expectations for asset managers including advocating for a standardised approach to emissions reporting and interim target setting to facilitate comparison and accountability, reducing the potential for greenwashing.
Furthermore, the guide proposes enhancing transparency about assets not currently included within targets and progress for bringing them into scope, while emphasising the reduction of absolute, real-world emissions.
In addition, it suggests revealing portfolio companies’ contributions to emission targets, promoting deep decarbonisation through support for high-carbon companies’ transition to low-carbon technologies and processes, rather than solely avoiding high-carbon sectors.
Lastly, the manual suggests setting targets that account for geographical and sectoral disparities, prioritising more ambitious goals for companies in developed nations and acknowledging challenges encountered by companies in developing nations.
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