Bank of the West to launch account for eco-friendly customers
Bank of the West is currying favor with customers who care about environmental sustainability.
The bank, which is a U.S. subsidiary of BNP Paribas, is launching a new checking account in early 2020 called 1% for the Planet that will show customers the carbon footprint of their purchases. The product launch is appealing to consumers who want to work with institutions that are aligned with their values.
“There’s a lot of data to indicate consumers are willing to switch brands in order to support a cause they believe in,” said Ben Stuart, chief marketing officer at Bank of the West. “We’ve seen a dramatic increase in new retail customers, as well as a dramatic increase in small and medium-sized enterprise business coming as a result of Bank of the West’s sustainable business practices.”
The bank is aiming to attract eco-friendly consumers by allowing them to measure the impact their everyday purchases have on the environment.
The account uses a tool called the Åland Index Solution developed by tech company Doconomy, a startup that helps banks launch environmentally friendly products. The technology categorizes consumers’ purchases and estimates how much carbon that purchase produces based on an algorithm developed by Doconomy, showing customers their carbon impact through online banking. A customer buying gas, for example, would see a heavier carbon footprint than a customer buying a subway ticket.
The decision to launch the account was based on results from quantitative research Bank of the West conducted in Portland, San Francisco, Los Angeles and Denver. The bank surveyed 200 respondents in each city, and the results indicated consumers would be willing to switch banks if they felt a new bank exercised sustainable business practices.
The new 1% for the Planet checking account is paperless, and the bank will donate 1% of the revenue it makes from the account to environmental causes. Customers must opt in to having their purchases’ carbon footprint measured, and the algorithm pulls from Thomson Reuters, Bloomberg and other emissions data sources to determine the carbon footprint of different purchase categories. The account also features a physical card that is biodegradable.
See also: Bank of the West adds ATMs for young customers on the move
In addition to the new account, Bank of the West is a member of Protect our Winters, a nonprofit that aims to curb climate change. The bank doesn’t finance any project involved in Arctic drilling and committed $1 billion to renewable energy initiatives last year. According to Stuart, the goal is to expand the carbon footprint tracking feature to all retail and commercial clients. The San Francisco-based bank has $91.5 billion in assets and just over 2 million customers.
Other major financial institutions are also appealing to eco-friendly consumers and taking decisions based on environmental sustainability considerations. For example, earlier this month, Goldman Sachs launched a new environmental policy that prohibits financing for Arctic drilling and enforces stricter controls on loans to coal companies. In addition, Bank of America this month announced it would be installing electric car charging stations at branches in a handful of states.
According to Nielsen data, consumers care about corporations prioritizing the environment. The company’s 2017 Global Consumer Confidence Survey indicated 69% of people in North America and 68% of people in Europe believe it is “extremely or very important that companies implement programs to improve the environment.” That number jumps to 83% in the Asia-Pacific region, 88% in Africa and the Middle East, and 94% in Latin America.
Chris Allieri, founder and principal of New York-based branding consultancy Mulberry & Astor, said Bank of the West’s efforts are emblematic of a changing industry.
“Banks and their consumers have finally caught on that banks have played a role in the degradation of the planet and the destruction of ecosystems; the consensus is that this must end,” he said. “This also isn’t about marketing. Banks and fintech startups alike must lead with real concerted action and let the marketing follow suit.”
Suman Bhattacharyya contributed to this report.
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