by Simone Gröneweg, Euro on Sunday
BEmotions occasionally boil over in the climate debate. While Fridays for Future activists block highways in protest, some simply deny the climate problems. Last year, the Federal Constitutional Court got involved in the debate and found that a lack of ambition in climate protection violated the civil liberties of the younger generation. Accordingly, our society is obliged to use the available resources wisely.
However, behavior and structures cannot simply be changed. This can also be seen in the financial sector, which is gradually opening up to the topic. In the meantime, the so-called ESG formula for assessing sustainability has prevailed there. The acronym stands for Environment, Social and Governance, i.e. for investing in harmony with the environment, social affairs and sensible corporate policy.
Financial institutions certainly have weight when it comes to climate change. “Banks have a direct influence on a country’s economy through loans, investments and services,” writes the management consultancy Cofinpro in a position paper. For the second time, €uro on Sunday examined whether and how the banks are tackling the issue of sustainability.
The large analysis is divided into two areas: First of all, the Social Science Institute Schad (SWI) evaluated the ecological sustainability of the various financial institutions in Germany for €uro am Sonntag. For example, an assessment was made of how great a bank’s efforts are to reduce its own CO2 emissions. For this purpose, the institute of Dr. Zielke Research Consult collects data. They come from the company’s annual and sustainability reports.
In addition to this test, the results of which can be found in the tables below, there is an extensive survey (also see tables below). We wanted to know how sustainable customers think their bank is. In this survey, sustainability banks such as GLS Bank, Ethik-Bank or Umwelt-Bank were left out. Why? Because their customers choose their institution anyway because of its sustainable orientation and a comparison with other financial institutions does not necessarily seem sensible.
If you take a closer look at the results, you will first notice that the test and survey led to different results. This can be attributed, among other things, to the different evaluation methods. In the survey, the PSD banks are at the top of the regional banks category. ING takes first place among online banks, and Targobank takes first place among branch banks.
The result looks different in the test: Hamburger Sparkasse (Haspa) ranks first among the regional institutes. “Our understanding of sustainability is part of the business strategy,” writes the institute on its website. Among the branch banks, the Unicredit Group is at the top. In the report, the banking group performs very well across all areas examined. “The sustainable goals can be read transparently on the company’s website,” explains Lisa Panek, project manager at SWI.
Heterogeneous picture in the industry
Such positive examples initially give hope that the industry will act sustainably. On closer inspection, however, there are still weaknesses in the banking world. “Overall, the picture is rather heterogeneous in terms of sustainability,” emphasizes project manager Panek. Most financial institutions are taking on the topic, providing structures and defining goals, but overall the efforts are not enough. The ideas and the will seem to be there, but the whole thing often remains in its infancy.
This is unfortunate, because nowadays hardly any customer-oriented company can afford not to embody a sustainable image. Customers can do something to counteract climate change by changing their own lifestyle and paying attention to sustainability when choosing products and services. And this is happening more and more often. “More and more customers seem to be willing to accept higher fees for a sustainable basic orientation of their bank,” explains Panek. The so-called environmental banks benefit from this customer group.
For this reason, the second study by the SWI aimed to evaluate the opinion and perception of customers. For this purpose, the institute analyzed the more than 80,000 customer opinions from the online survey on the “Most Popular Bank 2022”. This survey was carried out on behalf of the business magazine €uro in the first quarter of the year. Customers of different banks in Germany were asked how they judge various aspects of sustainability at their bank.
For this purpose, questions were asked about the perceived environmental awareness of the institutes. They were something like: “How satisfied are you with the range of sustainable products at your bank?” Or: “How satisfied are you with the environmental awareness and climate protection of your bank?” The answers in this area were included in the “Environment” category and accounted for 70 percent of the overall rating. In addition, an attempt was made to shed more light on the social commitment of the banks and the trust that customers have in their bank. For example, the following question was asked: “How satisfied are you with the social responsibility and social commitment of your bank?” And: “How much trust do you have in your bank?” These answers were included in the “Society” category. Their share of the overall rating was 30 percent.
The survey initially produced a rather sobering insight: At first glance, the topic of sustainability does not seem particularly important to customers. Only around 5.4 percent of all participants stated that they were a customer of an institute because of the high level of sustainability. However, as already mentioned, there are banks on the market that have made sustainability a top priority. So anyone who makes sustainability their top priority will probably switch to such a bank. But that doesn’t mean that the issue of sustainability is unimportant to the customers of other banks. On the contrary. The evaluation of the survey revealed that issues such as sustainable products, environmental awareness and social commitment on the part of banks, along with questions about interest rates and social media presence, are the most likely to trigger customer dissatisfaction. Accordingly, customers definitely value sustainability.
But how do you rate your own bank on the subject? Among the regional banks, the PSD banks in particular stand out positively. For example, they scored points on questions about sustainable products, ecological sustainability and social sustainability. The PSD banks were also among the best in the “Trust” category.
Branch banks do not use potential
Particularly striking: PSD-Bank Berlin-Brandenburg was the bank with the best overall result and slightly outperformed the other regional banks. “The customers of the institute who were surveyed were consistently convinced and satisfied with the efforts of the bank. The institute was able to show the best values in all areas,” reports Lisa Panek.
In general, customers perceived regional banks as more sustainable on average. All regional banks scored above average in the area of ”social sustainability”. Anchoring in the region, for example through social projects, is certainly one of the decisive factors for this circumstance.
The best online bank was ING, which was among the front runners across all categories. Among the branch banks, Targobank in particular stood out. The comparison between online and branch banks is interesting. The biggest differences were observed with the sustainable products. In this area, the online banks not only offer a larger range of products from the customer’s point of view, but also a more convincing product quality. It was a similar story with trust. “Online banks actually lack direct human contact and thus the opportunity to build trust in this way. A weak point that branch banks could exploit,” Panek points out.
The reality is different. A possible explanation for this would be the Corona crisis and the associated lack of direct contact with customers. Another possible reason could be that branch banks have been active in the market for a long time and have lost trust over several crises. You should work to win it back. After all, the customers’ green conscience should ultimately be given a real chance.
The test
Base: The Social Science Institute Schad (SWI) has analyzed the ecological sustainability of banks. For this purpose, data from the study “Spotlight CSR Credit Institutions 2022” by Dr. Zielke Research Consult, which originate from the annual and sustainability reports.
Rating: Since the test evaluates ecological sustainability, it does not refer to all the results of the Zielke study. Five criteria were used: anchoring of sustainability, measures for CO2-Reduction, green electricity share, CO2-Emissions per employee and ESG (Environment, Social, Government) in lending policy.
The survey
Base: How sustainable do customers find their bank? The Social Science Institute (SWI) investigated this question and summarized the results for €uro am Sonntag in a study. The basis for this was the survey “Most Popular Bank 2022” for the sister magazine €uro among almost 200,000 bank customers. More than 80,000 participants also answered questions about the sustainability of their bank. The financial institutions that were able to collect more than 200 customer opinions on sustainability were taken into account in the evaluation.
Rating: The questions related to the institutions’ perceived environmental awareness, the banks’ social commitment and the customers’ trust in the bank. The answers flowed into the categories “Environment” and “Society”. The environment was weighted at 70 percent in the overall assessment, and society at 30 percent.
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Image sources: Romolo Tavani / Shutterstock, Finanzen Verlag, Finanzen Verlag
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