The State of Sustainability in Financial Services

As the demand for sustainability increases, the global financial services industry needs to make a choice. But it is a struggle when you do not know the answer to certain important questions – ‘How sustainable is financial services, really?’, ’Will action lead to purpose as well as profit?’ ‘Can the industry maintain momentum despite the Covid-19 pandemic?’ A recent in-depth report by iResearch Services examines the current state of sustainability in financial services and looks at the value, challenges, and opportunities in embracing sustainability.

What is Driving Sustainability in 2021?

Sustainability’s pivotal moment began in 2018 when BlackRock’s Chief Executive Officer Larry Fink, in his annual letter to CEOs, said that the multi-trillion asset manager would no longer support companies that failed to make positive contributions to society. This was followed by companies such as Microsoft making new sustainability pledges. As the adoption of sustainability started gathering pace, the Covid-19 pandemic hit.

Sustainability at a Crossroads

With the onset of Covid-19, adopting a more sustainable way of life emerged as a solution, thereby pushing sustainability to the forefront. Vaughan Lindsay, CEO of ClimateCare says, “Environmental, Social and governance (ESG) policies that go beyond ‘do no harm’ are no longer a nice to have; they are now fundamental to business success. Increasing consumer awareness has resulted in customers actively choosing brands that are more purposeful and active in the sustainable space.”

Sustainability and Success

A global study of 550 financial services professionals conducted by iResearch Services found that nearly 50% believe sustainability will drive new customers.

Morningstar reported that during 2020, sustainable open-end and exchange-traded funds (ETFs) available to European investors attracted net flows of €233 billion, a strong indicator of the close connection between sustainability and success.

From the Horse’s Mouth: How Sustainable is Financial Services?

Sustainability is far from a fad, in Financial Services, according to our latest 2021 Sustainability survey, which spoke to 550 senior decision-makers in Financial Services across Europe, Australasia, China, Japan, the USA, UK, Russia, and India.

Only 27% of the financial services professionals felt sustainability was a future-proofing exercise, meaning that the majority feel now is the time to reap its benefits. This is also reflected in terms of the budgets allocated to sustainability initiatives with most financial services firms putting in excess of £500,000 budget each year.

Yogesh Shah, CEO, iResearch Services says, “Employees and employers are in sync on the issue of sustainability, both sides perceive the need for sustainable initiatives as paramount to the future of their business. What is perhaps surprising is that only a small portion of financial services professionals feel the bottom line will be impacted.”

For more insights into just how sustainable sustainability really is in financial services, read our in-depth report today.

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