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Brokers have predicted that lenders that make a positive environmental, community, and social impact will attract and retain more borrowers, according to a new report.
Broker Pulse, the lending insights division of Agile Market Intelligence, has released the People & Planet Report 2024 (sponsored by Beyond Bank, P&N Bank, and People First Bank), which examines the attitudes, perceptions, and priorities of Australian consumers and mortgage brokers on the evolving role of social and environmental considerations in residential mortgage lending.
The consumer survey – fielded by Lightspeed Australia – received a usable sample of over 2,000 responses (including 680 who have an existing home loan).
The broker survey – which was fielded by the Broker Pulse panel at Agile Market Intelligence – received a usable sample of 477 mortgage and finance brokers.
Brokers were asked to what extent they believe clients are more likely to remain with a lender for the life of a home loan if it invests in environmental, community, and social causes and demonstrates positive impact.
Three in five brokers (60 per cent) said they believed their clients were more likely to stay with a lender that is actively engaged in environmental and social programs.
However, of this cohort, the majority believed that these factors would only have a small amount of influence. Just 6 per cent said they strongly believed a lender’s environmental impact will influence client loyalty significantly.
The largest proportion of brokers who said they believed clients were significantly more likely to remain loyal to a socially and environmentally conscious lender was aged over 65 (14 per cent).
Only 8 per cent of brokers in the 25–34 age bracket and 5 per cent of those aged between 35 and 44 said they believed this to be true, while no broker aged 18–24 thought this was the case.
Around 40 per cent of brokers said that they did not believe a lender’s ESG impact had any bearing on a client’s decision to choose and remain with them for the life of their home loan, with brokers in nearly all age groups agreeing on this.
“While not industry-wide, the environmental, community and social impact of lenders has an important role in client decision-making when selecting a long-term lender,” the report said.
More clients value positive impact initiatives
The growing loyalty towards socially and environmentally conscious lenders is consistent with brokers’ belief that clients will progressively favour lenders that offer these programs.
According to the report, 69 per cent said they believe these factors would become more important for clients in the near future, while 52 per cent expect it to somewhat increase in importance and 17 per cent predicted a significant jump.
While the youngest generation is most confident that it would significantly increase, brokers of all ages indicated in strong numbers that they expect it to somewhat increase over the next few years.
Only 5 per cent of all respondents said they believe these factors would decrease in importance, but more than a quarter of the brokers surveyed predicted no change in how much a client values a lender investing in these programs.
When asked how an Australian mortgage lender could approach environmental and social issues, a female broker in the 35–44 age bracket urged lenders to invest more in preserving the environment for future generations, particularly as climate change becomes a growing issue.
To read the inaugural People & Planet Report 2024 report in full, click here.
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