In our current age it is almost impossible to escape the impending climate crisis and its impact on the world around us.
Just Stop Oil regularly grabs headlines with its disruptive stunts, politicians are constantly quizzed if they are eco-friendly enough, and every summer is hotter than the last.
You would assume that, considering this, it would be impossible to not be fully aware of the environmental impact of your actions, but that does not seem to be the case in our industry.
Recently, almost two-thirds of advisers reported that their clients had both not heard of green mortgages and did not understand them.
Worryingly, this represented an increase on the previous year, showing a troubling upwards trend in people’s ignorance in this area.
A green mortgage is a mortgage for houses that meet certain environmental criteria, such as a good sustainability rating, which are offered with a lower interest rate or an increased loan to incentivise buyers.
So it does raise the question of why so few people are familiar with it, given environmental issues are frequently a front page story.
Perhaps they have never connected that their mortgage could be used to actually do good in the world, instead simply seeing it as a means to an end in purchasing a house.
As a first-time buyer who is not extensively educated on financial matters it is likely they will not be immediately aware of all the options available to them.
The simple solution to this would be for financial advisers to point out this option, but I’m sure this is not as simple as it sounds.
Awareness of environmental issues will never be lacking but the financial services industry can’t ride this sentiment unchecked.These complications may come not out of ignorance but rather due to a shift in priorities.
It has been a difficult 18 or so months for a lot of people, with a cost of living crisis, the chaos following 2022’s "mini"-Budget, and the drastic rise in mortgage rates.
In this troubled and turbulent environment, those buying homes, particularly for the first time, have a lot of factors to consider when securing the best deal for them and their loved ones.
Finding the right price at a reasonable rate is, of course, always a higher priority than any kind of eco conservation as it obviously has the greatest immediate impact on those who are purchasing the house.
Additionally, while ignorance is always a powerful force for inaction, knowledge is also impactful for those deciding what to do with their mortgage.
There have been a multitude of stories recently warning of companies indulging in practices such as greenwashing, which may cause buyers to be overly cautious and suspicious.
It is obviously not fair or right to tarnish all attempts at environmentally conscious investment with the same cynical brush after a few bad apples, but it is certainly understandable why some buyers may exhibit some caution.
So how can companies assuage these worries? I don’t believe there is any easy answer other than to demonstrate genuine enthusiasm and passion for their products
In our modern age, awareness of environmental issues will never be lacking but unfortunately the financial services industry can’t ride this sentiment unchecked.
Awareness must be raised about how the environment interacts with financial services and how customers can support this important issue while engaging in some of life’s most important decisions, such as buying their first home.
However, what is equally important for advisers is to understand the personal circumstances that customers find themselves in, specifically in these difficult times.
With consideration and general information we should be able to move towards a future in which what is best for the consumer and what is best for the planet are more closely aligned than ever before.
Tom Dunstan is a senior reporter at FT Adviser
tom.dunstan@ft.com
