Investigating green finance product awareness and perceived adoption influencers
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Abstract
Green finance (GF) is an avenue to achieve Sustainable Development Goals and economic inclusion. While several studies have focused on GF investment instruments, such as green bonds and green funds, retail instruments, such as green mortgages and green loans, are often overlooked. South African consumers are believed to lack financial literacy; therefore, their lack of awareness of a niche concept such as GF and the limited availability of data on retail consumers and sustainable finance present a challenge. Additionally, the study of awareness separately is not enough, as it does not always translate to use. This study explored financial institutions’ employee awareness and the use of specific GF products available in the South African market, as well as perceived factors influencing personal and consumer use. Thirteen semi-structured interviews were conducted and thematically analysed. Findings showed employee awareness of all 10 products, with the Standard Bank green bond and RMB green bond highly recognised. Although awareness was high, the use of GF products was very low; only two participants used the surveyed products. The three products with actual use were for home financing, and energy-efficiency home financing was the most popular intended use. GF issuers, the structure of GF and individuals’ perceptions and beliefs about sustainability were factors influencing the use of GF products. This study provides new insights into challenges that need to be tackled to advance GF. An accessible GF market is possible through awareness and educational campaigns, by restructuring GF and GF issuers and by appealing to and addressing individual intrinsic motivators.
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