What you need to know:

• Banks and financial services are not cutting through the noise when pitching their sustainability and ESG [Environmental and Social Governance] credentials, according to Humm Group CEO Rebecca James.
• But ESG policies are changing the world for the better and give reasons to be optimistic, per Judo Bank co-CEO Joseph Healy.
• Nine/CrowdDNA research suggests Australians are increasingly looking to increase their financial literacy.

Banks and financial services are increasingly vying for ethical investment dollars – but none are cutting through, according to Rebecca James, CEO of fintech Humm Group.

The view that marketing efforts are failing to hit the mark on environmental, social and governance initiatives – chimes with those of senior CMOs at a roundtable convened by Mi3 and Accenture.

While James said Australian consumers were still more price-focused, the head of a challenger bank pitching to small and medium businesses said the wider financial market is taking Environmental, Social and Governance (ESG) policies extremely seriously – because they are being pushed by upstream investors, which are in turn taking cues from the world's largest asset managers who see environmental threats as the largest risk to long-term stability.

“There’s no publicly listed company that’s looking to attract external capital that will not have investors saying, ‘what are your ESG policies?’” Joseph Healy, co-founder and co-CEO of Judo Bank, told an event hosted by Nine.

“Unless you’ve got a clear – and live by what you say – environmental and social governance framework, [investors say] ‘we’re not interested in you’. A lot of this pressure is behind the scenes, but it’s real. The investor market is nudging and nudging and nudging corporations to embrace ESG principles. Not as a slogan, but as a way to think about the business.”

That implies marketing and sustainability functions must harmonise internal and external efforts.

The comments came as part of a panel discussion about the strength of the Australian economy, consumer sentiment and the “cautious optimism” across many parts of the economy more than a year on from the first lockdowns – though the event's timing, as Melbourne's lockdown extended to a second week, was unfortunate.

Gareth Aird, Head of Australian Economics at the Commonwealth Bank, said the economic rebound had surprised “pretty much everyone”. He noted while the near future looks good, the CBA does expect interest rates to rise earlier than the Reserve Bank is predicting.

ESG marketing not landing

Asked whether brands are showing genuine social consciousness to consumers, Humm Group's Rebecca James said while banks are trying and Australians have the goodwill to look into ethical and sustainable investing, the money tends to flow to lower-priced alternatives.

“I think we are seeing some responses, and I think in the challenger brand space, from the research we saw this morning around ethical investing, even banks in terms of promoting those stances… I don’t think any have really cut through,” she said.

“I’ve worked in financial services my whole career. I often feel in research, we want to do the right thing but the decision does come down to rate and price at the end of the day. There’s a lot of goodwill. But no true brand is really standing out for me in that space.”

Women, crypto and financial literacy

The finance panel was hosted as part of Nine’s quarterly State of the Nation series. In February, the event discussed the travel and tourism sectors. The publisher uses the format to launch its latest sectoral research in a bid to give advertisers more reasons to spend money within its broader channels and niches.

The latest research suggests women are driving an increase in online conversation about financial literacy. It finds there has also been a 136 per cent increase in interest in cryptocurrency.

“As we dug into it a bit, looked at the particular areas women were most focussed on, they were things like managing a daily budget, building better financial budgets – it was a surprise to us,” Michael Stephenson, Nine’s Chief Sales Officer, said.

“Certainly with some older parts of the audience, there were some societal norms about men having managed money. The real thing we see in the emerging habits, in younger generations, is a desire to take control of their situation.”

Australians between 18 and 34 years old were the least confident with finance management – 53 per cent said they were ‘somewhat’ or ‘not very confident’, according to a survey by Nine carried out with CrowdDNA, while those on incomes between $80,000 and $199,000 were the most confident.

Fifty-four per cent of the 1,912 people surveyed on Nine’s Consumer Pulse audience panel platform said choosing an Australian owned or operated business was important, followed by 38 per cent who wanted good corporate citizens.

Only 22 cent of respondents said they don’t think about the values of financial organisations.

Per the resarch, Australians say they need help to:

• Grow longterm wealth (31 per cent)
• Set themselves up for retirement (26 per cent)
• Manage their super (24 per cent)
• Save money (21 per cent)
• Have enough for emergencies (18 per cent)
• Choose between investment options (17 per cent).