By Paul Holland, CEO and founder of Beyond Encryption
As part of the 2050 goal to reach Net Zero, sustainability has become business-critical. The conclusion of COP26 has placed climate change at the forefront of people’s minds. Is the financial services industry moving fast enough to keep up with the rapid pace of change?
An estimated 51% of consumers feel that FS companies should be doing more to help the environment; a belief evidently mirrored by government, with new legislation requiring large businesses to disclose their climate-related risks and opportunities. Corporate organisations are also under the magnifying glass by consumers, with 47% of people willing to ditch brands that do not reflect their personal values for more sustainable alternatives.
According to the Cambridge Institute for Sustainability Leadership, the key characteristic banks need is an ‘active mindset’. In other words, fostering financial leadership that prioritises relationships over transactions and views the future as inevitably low carbon.
One avenue business leaders can take is to capitalise on the growing awareness surrounding transformative potential in the marketplace. Moving forward, sustainable tech will be paramount, integrating environmental, social and governance (ESG) criteria into their long-term strategies and driving positive value exchanges towards a sustainable economy.
The pandemic has already provoked a revolutionary technological movement for banking, leading to an unprecedented 88% growth in investments apps, not to mention an 80% digital completion of sales for Santander sales during 2020. However, businesses still need to consider their long-term digital agility, with the further extension of digitised banking operations being instrumental for the transition to a more carbon-conscious society.
An estimated 72% of UK banks are embracing digital technology to make their business operations greener. Automation, machine-learning and paperless communications are the main sources of focus for these organisations. Paper-saving is particularly relevant, and is instrumental for the COP26 outcome of ending and reversing deforestation by 2030.
According to EY, an estimated 507 million paper documents are sent to FS customers each year. When considering that the average tree provides 10,000 sheets of paper, financial firms are currently responsible for the annual deforestation of over 50,000 trees.
Sustainable digitalisation will be a vital stepping stone on the road to achieving carbon reduction goals. Migrating client communications to specialised software solutions will not only see a drastic reduction in environmentally-damaging print, pack and post processes but could allow the financial industry to achieve potential annual savings of £1.3bn.
Banks have a vital opportunity to not only protect the environment but improve their customer offering, with companies that do not invest in green technologies for customer-facing processes being left behind. 63% of consumers would consider switching banking providers if their communications don’t meet their expectations, including greener solutions for an increasingly aware society. Consumer appetite for sustainable practices is high, with 45% choosing paperless billing purely because it is a greener alternative, and 41% finding that going paperless has enabled them to engage with their finances better than ever before.
We’re moving in the right direction but more could be done. COP26 has done its part in bringing greater visibility to the problem at hand, however, visibility alone is not enough. Businesses must act to implement sustainability practices and undertake rigorous carbon-saving actions, ensuring the safety of our planet for today and future generations.