Banks in the UAE find consumers soliciting their assistance to decipher the ecological consequences of their financial transactions.
In a significant move towards promoting sustainability, Visa, Emirates Nature-WWF, and the United Nations Climate Change Conference (COP28) have joined forces to release the '2023 Sustainable Commerce' study. The comprehensive research, conducted by 4Sight Analytics in August-September 2023, delves into consumer and business behaviours, and the readiness of infrastructure to support sustainable commerce in the UAE.
The study reveals that parents of young consumers (8-18 years old) in the UAE are reporting a heightened receptiveness to sustainable practices and greater environmental consciousness among their children. This finding underscores the importance of fostering eco-friendly habits at an early age.
Dr. Saeeda Jaffar, Visa's Senior Vice President and Group Country Manager in the GCC, highlighted the growing demand for financial institutions to play a more active role in promoting sustainability. In response, Visa has launched the Eco Benefits Bundle, a climate banking platform in collaboration with ecolytiq and Mashreq. The innovative platform integrates eco-friendly features into card payments, enabling users to track their environmental impact and contribute to carbon offset initiatives.
The Eco Benefits Bundle is not just a step in the right direction, but a significant response to the expectations of consumers. More than half of the surveyed consumers (51%) expect their banks to guide them in making sustainable financial choices, and 52% look to their banks to help them understand the environmental impact of their purchases.
A substantial 64% of consumers in the UAE have stated that they chose a bank with strong green credentials, and this trend is reflected in the growing number of consumers willing to make a card with rewards for sustainable behaviours their primary one (43%). Furthermore, over two-thirds of UAE consumers believe that they can make a difference in decarbonization.
However, the study also highlights a significant barrier for the majority of UAE consumers: the perceived higher cost of sustainable products. This finding underscores the need for financial institutions to find ways to make sustainable options more affordable for consumers.
In a comment on the partnership, Laila Mostafa Abdullatif, Director General at Emirates Nature-WWF, emphasized the importance of cross-sectoral collaboration and the role of government policies and financial institutions in driving sustainable practices. The 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.
Visa's commitment to making a positive impact through local sustainable initiatives is evident in its $250,000 grant to Emirates Nature-WWF. This collaboration is set to shape the future of sustainable commerce in the UAE and beyond, as the study also analysed consumer behaviour and merchant readiness for sustainable commerce in Saudi Arabia, Kuwait, and Qatar, in addition to the UAE.
Moreover, UAE consumers lead in water conservation and reducing single-use plastics. With 69% of individuals in the UAE expressing their willingness to recommend banks that provide sustainable payment options, it is clear that the demand for sustainable practices is on the rise.
The '2023 Sustainable Commerce' study is a significant step towards promoting sustainable practices in the UAE and beyond. By engaging in meaningful discussions with a diverse range of participants, the study provides valuable insights into consumer behaviours and the readiness of infrastructure to support sustainable commerce. The findings of the study will undoubtedly guide financial institutions, businesses, and policymakers in their efforts to promote sustainability and combat climate change.
