McKinsey and NielsenIQ analyzed retail sales data covering 600,0000 product stock-keeping units and representing annual retail revenues of $400 billion from 2018 to 2022. They found that products with sustainability claims had a 1.7% compound annual growth rate advantage over companies that did not make similar claims.
This sustainability-aware and driven generation is moving the needle. One can make a difference by putting his money where his advocacies are.
This means you can do something if you want a better world for future generations. For instance, you can prioritize sustainability in financial services and your purchasing decisions, essentially in all areas of your life that entail deciding where to keep, use, and spend your money.
The Lay of the Land
It is a time of great upheaval. Net-zero greenhouse gas emissions, climate-positive supply chains, energy efficient processes, social responsibility, renewable energy, sustainability specialists, vegan, cage-free, eco-friendly, biodegradable — these are no longer just buzzwords. Businesses are listening and incorporating them into their business models.
They have no choice. While businesses primarily care for profits (as is normal), a seemingly inexorable push toward sustainability has inextricably linked profits with a business’s sustainability strategy. Many studies have proven this, including the one by McKinsey and NielsenIQ cited above. Another one by Cone indicates customers are more likely to have a positive image of (87%) and be more loyal to (88%) a company that espouses sustainability ideals.
Now that you have the businesses’ attention, how can you — a consumer, customer, and client — add your voice to the general clamor? How do you incorporate your sustainability advocacy in your life, particularly in your financial service decisions?
Choose Digital Remittances
Digital remittances, i.e., the electronic transfer of money, are quick and convenient. The wide availability of the following makes sending and receiving money through digital channels easy:
- Digital remittance services and options
- Digital remittance apps
- Digital banks and mobile money wallets
The comprehensive integration of digital money solutions with conventional banking channels also helps. It’s easier than ever to source digital remittances from or load mobile money wallets using traditional bank accounts.
Their costs also continue to go down through a concerted global effort, a mix of policy and framework and a result of the collaboration between the public and private sectors. Specifically, governments are providing remittance service providers with a market and policy environment that encourages investment in technologies and the exploration of alternative processes that will make remittance services not only better but, ultimately, cheaper.
What is driving this public policy push? It’s the United Nations (UN) Sustainable Development Goals (SDG). Lowering the average remittance services cost globally is one of the UN SDG targets. This target includes the following specific objectives:
- The average remittance services should be lower than 3% by 2030.
- The total cost of sending remittances in any country-to-country corridor must be 5% or lower.
Why is lowering the cost of digital remittances a UN SDG target? The answer: Digital remittances are more sustainable than traditional remittances.
The cost of digital remittances, even if it’s not yet as low as the UN SDG target, is still half that of traditional remittances. This corresponds to millions of dollars in aggregate savings for remittance beneficiaries and payment service providers.
Digital remittances will only become more sustainable as the costs become even lower in the future.
Digital remittances are quick. Instant money payment services enable real-time remittance, so receivers can get their money in seconds. Traditional remittances take at least a few days.
The availability of money remittance apps, especially one integrated with traditional bank accounts, funding sources (e.g., credit cards), and digital wallets, means senders and receivers can transfer and receive money with a few taps on their mobile phones. This negates the need to travel to and queue at a local money transfer branch, saving remittance customers even more time.
In a study, Xoom’s calculations put a dollar value on time savings. As a case in point, it found that remittances can save the Mexican economy nearly 100 million hours and $450 million in economic value.
Carbon Footprint Reduction
Digital remittances also lead to a reduced carbon footprint among senders and receivers. Since people do not need to travel to send or receive money, their remittance activities do not generate undue greenhouse gases.
Increased Financial Inclusion
Digital remittances serve as the general population’s gateway to financial services. Armed with a mobile phone and mobile internet, unbanked and underbanked people (those who may not have the means or the know-how to use traditional banking services) are finding recourse in digital remittances and other digital money services. Eventually, they try more formal banking services.
Research shows that increased remittances positively correlate with enhanced formal financial services (e.g., deposits and credits). This indicates that digital remittances pave the way toward financial inclusion.
Support Sustainability by Choosing Digital Remittances
Digital remittances lead to enhanced cost-savings, time-savings, carbon footprint reduction, and financial inclusion. They are a sustainable way of sending and receiving money.
Practicing sustainability in financial decision-making means choosing digital remittances over traditional means of sending and receiving money.
This applies to everything, including payments. When paying for a purchase, pay electronically using your mobile wallet or your money transfer app. Given a choice between two merchants, buy from the seller that accepts digital payments.
Doing these little things can help enforce the stickiness of digital remittance and payment services, drive the growth of the digital remittances and payments ecosystem, and encourage other financial service customers to likewise shift to digital.
Support Financial Services Companies That Have Operationalized Sustainability
You can go beyond choosing digital remittances, paying electronically, and merchants buying from merchants that accept digital payments. You can also use companies with an operationalized sustainability strategy.
Send your money and make digital payments using the platform of an organization with an established environmental, social, and governance (ESG) framework. In other words, support a company that incorporates ESG factors into its business model.
For instance, you can check if your financial services company has committed to the following initiatives.
- Paper consumption reduction through digitization and digitalization
- Barring single-use plastic products in the workplace
- Using technology to monitor and track energy use and implementing solutions to increase energy efficiency and savings in the workplace
- An established and effective waste management policy
- Upskilling and training for employees
- Investing in technology and processes that will improve the customer experience
- Spearheading and supporting projects that will benefit the community (scholarships, disaster relief, medical missions)
- Promoting financial inclusion, especially for the unbanked and underbanked
- Pushing for affordable and accessible financial services
- A culture of accountability among the company executives and leadership
- A system that enforces the integrity of money movement
- Cooperating with regulators and other entities to ensure compliance with legal and regulatory safeguards that protect the interests of customers
Let Your Money Make a Difference
The current push for sustainability is not a fad. Governments and businesses are listening. You, too, can be heard by practicing sustainability in all areas, including your choice of financial services and financial service providers.