UAE consumers turn to banks for advice on sustainable finance
By Puja Sharma
Study released on COP28 day reveals fifty-one percent (51%) of surveyed consumers in UAE expect their bank to guide them in making sustainable choices for their finances.
–Sixty-five percent (65%) of consumers believe higher cost of sustainable products is top barrier to purchase, followed by lack of awareness (54%).
–Interviews with SMBs and experts reveal desire to adopt sustainable practices but often hindered by lack of technical know-how.
Visa and Emirates Nature-WWF released the UAE results of their ‘2023 Sustainable Commerce’ study on the day of the United Nations Climate Change Conference (COP28) in UAE. The study scrutinizes consumer and business behaviors, and the readiness of infrastructure to support sustainable commerce. The joint Visa-Emirates Nature-WWF study reinforces the urgency for all industry stakeholders to take decisive collective action to promote sustainability through responsible innovation for the benefit of consumers, businesses and the economy.
Businesses and Sustainability
Qualitative interviews revealed that MSMEs and KOLs have a fair understanding of sustainability but lack a holistic and contextual comprehension of the concept. This gap is influenced by several barriers, including cost implications for both businesses and consumers, fear and resistance to change, pressures from competition and profitability, and resource constraints. However, there are also enablers that can foster sustainability. These encompass regulatory policies and frameworks that create the right ecosystem, sustainable financing that provides a ‘push’ effect, and the necessity for collaboration among stakeholders to drive sustainability. Visionaries, typically medium-sized businesses, grapple with significant pressure from global partners to adopt sustainability standards. However, they are often hindered by a lack of technical knowledge.
Dr. Saeeda Jaffar, Visa’s SVP and Group Country Manager in GCC, said: “More than half of consumers in the UAE are looking to their banks for guidance in making more sustainable financial choices. This underlines the growing demand for financial institutions to play a more active role in promoting sustainability. To address this need, Visa, in collaboration with ecolytiq and Mashreq, has launched the Eco Benefits Bundle. Our commitment to local sustainability is underscored by our partnership with Emirates Nature-WWF, through which we aim to co-create and implement science-based projects supporting local nature and wildlife preservation, climate action, and the green economy. We firmly believe these initiatives are steps in the right direction towards promoting sustainability through responsible innovation.”
Laila Mostafa Abdullatif, Director General at Emirates Nature-WWF, said, “For over two decades, Emirates Nature-WWF has been a prominent and active partner in environmental conservation in the region. Cross-sectoral collaboration is at the heart of conservation success. Government policies and financial institutions have a vital role to play in driving lasting behaviour change and adoption of sustainable practices amongst consumers. We are delighted to partner with Visa on this study, as we aspire to build a sustainable future for generations to come.”
Visa’s Sustainable Commerce study analyzed consumer behavior and merchant readiness for sustainable commerce in the UAE, Saudi Arabia, Kuwait, and Qatar. Visa recently launched the Eco Benefits Bundle, a groundbreaking climate banking platform in collaboration with ecolytiq and Mashreq. This innovative solution integrates eco-friendly features into card payments, enabling users to track their environmental impact and contribute to carbon offset initiatives.
Visa is committed to making a positive impact through local sustainable initiatives, demonstrated by a $250,000 grant to Emirates Nature-WWF. This collaboration aims to co-create and implement science-based projects supporting local nature and wildlife preservation, climate action, market transformation, the green economy, and food and water security in the UAE.
Key Findings:
- Future bank customers: making sustainable choices
A significant 69% of individuals have expressed their willingness to recommend banks that provide sustainable payment options (cashless/contactless payment). 64% of consumers stated that they chose a bank with strong green credentials. Moreover, more than half of the surveyed consumers (51%) expect their banks to guide them in making sustainable financial choices.
Interestingly, 52% of consumers also look to their banks to help them understand the environmental impact of their purchases.
- Sustainable benefit becomes a feature attraction: the key to becoming a primary card
Rewards for sustainable behaviors are a significant attraction, with 43% of consumers willing to make such a card their primary one.
Sustainability evaluations of bank providers are still mainly focused on known initiatives like reducing paper and byproduct usage.
Factors considered while evaluating a bank provider on sustainability include going paperless (52%) and promoting cashless payments (51%).
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December 04, 2024