SINGAPORE - More younger consumers in the region want to spend their money on sustainable products, a study noted on Thursday (Dec 30).
It found that Gen Z consumers - those aged 18 to 23 - and millennials (24 to 39) are driving this trend towards a greener future.
The survey noted that 51 per cent of Gen Z respondents in the region said they were spending more on sustainable products - a huge jump from the 7 per cent in 2020.
Millennials also shared the same sentiments, with 61 per cent saying that shaping a better future is the key motivation for them spending more on sustainable products, an increase from 41 per cent last year.
In Singapore, 26 per cent of Gen Z consumers and 45 per cent of millennials expressed their hopes for a sustainable future, said UOB, which commissioned the survey.
Ms Jacquelyn Tan, head of group personal financial services at UOB, said: "Sustainability is no longer something that is just nice to have.
"Sustainability starts with consumers' everyday choices, from where they live and how they commute to which merchants they spend at and what they invest in."
She added that almost 90 per cent of Asean respondents said they want more sustainable investment and financing options.
UOB responded by launching a credit card earlier this year with eco-friendly deals that cover lifestyle and dining, for instance. It also introduced green loans for car owners and home owners.
"We are seeing greater interest in these green financial solutions from our millennial customers," said Ms Tan.
About half of the applicants for the green car loan are under 41, she added, although such customers only make up 29 per cent of the normal car loans.
The UOB study also found that respondents in Singapore have been making lifestyle changes to live more sustainably.
About 31 per cent said they are willing to pay more for sustainably sourced goods and services, while 36 per cent have been replacing their current sources of goods and services with more sustainable alternatives.
In line with this trend, the appetite for sustainable investments is also growing across the region, UOB said.
It noted that 91 per cent of survey respondents said they hope financial institutions can provide more information about the benefits of sustainable investing and offer a greater range of options in investment solutions.
This was particularly prevalent in Indonesia, Singapore and Malaysia.
In Singapore, 13 per cent of respondents already buy sustainable investment products, while another 61 per cent said they are considering sustainable investment products if these match their preferred risk profiles.
The bank added that incentives are highly effective in motivating Singapore consumers to go green, as 88 per cent said they were interested in rewards or rebates to support eco-friendly businesses.
Specifically, 81 per cent of respondents wanted to convert reward points earned on their credit cards to green credits for the adoption of renewable energy sources.
Ms Tan said: "The number of customers investing in our environmental, social and governance-linked products grew by six times after we launched them in late 2020.
"We expect demand to continue to grow, with more consumers looking to do good and to contribute to sustainable development."
The poll surveyed 3,500 respondents from five Asean countries in July, including 1,000 from Singapore.