Why choosing a responsible bank doesn’t have to be more expensive

According to a report by PWC published earlier this year, 48 per cent of Australians prefer to purchase from companies with strong values and commitments to doing the right thing. Perhaps more strikingly, this figure is up from 32 per cent in 2019, suggesting that the pandemic has accelerated consumer demand for ethical business practices.

And when it comes to banking, the message is even clearer. New research commissioned by Great Southern Bank has revealed that a whopping 92 per cent of Australians with a mortgage would rather use a lender with a high standard of ethics, environmental commitments, and social and community values.

There is a perception, however, that all this comes at a price. Whether it’s organic food, Fairtrade coffee, or ethical fashion, we have come to expect to pay a premium on goods and services you can enjoy with a clear conscience. But this isn’t necessarily true.

Read on to find out what makes a responsible bank and how using one could even save you money.

What is responsible banking?

Responsible banking used to mean little more than not lending money to people who couldn’t pay it back. In recent years, however, the idea has expanded to include transparency of policies and commitments to good corporate governance, social causes, and environmental action.

On the environmental side, this might involve a bank committing to net zero by reducing operational emissions and those of its mortgage portfolios and investments, whereas the social aspect could mean being inclusive and diverse, committing to reconciliation, and supporting the communities in which it operates.

What is sustainable banking?

The United Nations Environment Programme (UNEP) defines sustainable business practices as encompassing environmental, social, economic, and governance issues. The terms ‘sustainable banking’ and ‘responsible banking’ are often used interchangeably and effectively mean the same thing.

How a responsible bank can save you money

As we mentioned earlier, there’s an expectation that ethical businesses are more expensive. And while people might be willing to pay a little extra when the economic outlook is rosy, doing so can be more difficult to justify when times are tough.

Indeed, our research has shown that 78 per cent of people find it challenging to balance their ethics and values with selecting a lender with the best rates.

But the thing about expectations is that they’re not always accurate.

To determine our cost competitiveness, we supplied Canstar, Australia’s biggest financial comparison website, with monthly loan details of 48,089 customers on over 60,000 home loans. This information was used to deal match and calculate the cost differences (i.e. interest and fees charged) for each customer of having their loan with Great Southern Bank as opposed to one of the Big Four.

The results exploded the myth of responsible banking costing more!

Canstar found that customers with a home loan at Great Southern Bank made an estimated average saving of $1,182 over the year ending June 2022 compared to if their home loan was with one of the Big Four banks.

So there you go, you can have your ethical cake and eat it after all.

How does Great Southern Bank demonstrate responsible/sustainable banking?

Great Southern Bank’s commitment to responsible/sustainable banking is demonstrated by three action plans. These are:

Climate Action Plan

We published our Climate Action Plan in 2022, having achieved carbon neutral status the year before.

Here are some of the commitments we’ve made towards tackling climate change.

• Be net zero by 2040 (10 years earlier than the target date set by the Paris Agreement).
• Align our greenhouse gas (GHG) emission reduction targets with the Paris Agreement.
• Source 100% renewable energy for our offices and branches by 2030.
• Maintain carbon neutral certification under Climate Active.
• Enable our team members to become agents of change.

For a more detailed breakdown of our climate change commitments, click here.

Progress on our Climate Action Plan will be published in our 2023 Annual Report.

Financial Inclusion Action Plan

Helping all Australians achieve their financial goals has been at the heart of what we do since we began life as a credit union back in 1946.

We’ve completed all the actions set out in our first ‘Foundation’ Financial Inclusion Action Plan, with a focus on the following areas:

• Products and services
  Providing fair, affordable and accessible products and services.
• Financial capability
  Fostering organisational culture to enhance financial capability of team members, customers and our communities.
• Understanding financial vulnerability
  Investigating, advocating and collaborating for improved responses to financial vulnerability.
• Economic security
  Removing barriers and providing opportunities for economic security, equality, and growth.

Our second Financial Inclusion Action Plan will be published in mid-2023. For a more detailed breakdown of our commitment to financial inclusion, click here.

Reconciliation Action Plan

We’re proud to have made a long-term commitment to support financial and social inclusion and prosperity for Aboriginal and Torres Strait Islander peoples.

We’ve delivered on all the commitments from our first ‘Reflect’ Reconciliation Action Plan, which focuses on:

• Building the cultural capability of our team.
• Attracting and retaining Aboriginal and Torres Strait Islander team members.
• Considering the perspectives of Aboriginal and Torres Strait Islander peoples in the design of our products and services.
• Including Aboriginal and Torres Strait Islander businesses in our supply chain.

We've begun developing our next Reconciliation Action Plan, which will be published later this year. For a more detailed breakdown of our commitment to reconciliation, click here

Ready to switch to a responsible bank?

If you like the sound of responsible banking that actually saves you money, it’s never been easier to switch your salary and payments to a Great Southern Bank Everyday Account.

If you have questions about how to switch, feel free to give us a call on 133 282. Alternatively, you can always pop into your nearest branch.