Asean consumers, particularly those of the younger generations like Gen Z and millennials, are more influenced by sustainability issues than ever before as they recognize the possible impact of climate change on their children’s well-being, according to a recent study.
One in two (51%) Gen Z respondents (aged 18 to 23 years old) in the Association of Southeast Asian Nations (Asean) region say that shaping a better future for current and future generations is a key motivation for spending more on sustainable products, the UOB Asean Consumer Sentiment Study 2021 states. This figure jumped by more than seven times from just 7% in 2020.
The same sentiment was shared, the study notes, by a growing group of millennials (aged 24 to 39 years old): 61% in 2021 compared with 41% in 2020. In Singapore, more Gen Z and millennial respondents also expressed their hopes for a sustainable future: up 23 percentage points to 26% and 17 percentage points to 45% in 2021 from 2020, respectively.
“Sustainability is no longer a nice to have,” says Jacquelyn Tan, head of group personal financial services, UOB. “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.”
As well, she notes: “We are seeing greater interest in green financial solutions from our millennial customers. Close to five in 10 applicants for our UOB Go Green Car Loan are below the age of 41, whereas they make up only 29% for our normal car loans.”
The study also finds that respondents in Singapore are making changes to their lifestyles to live more sustainably. About one in three (31%) respondents say they have been willing to pay more for sustainably-sourced goods and services, while 36% have been replacing their current basket of goods and services with more sustainable alternatives.
Incentives have been highly effective in motivating respondents in Singapore to go green. Close to nine in 10 respondents (88%) say they would be interested in rewards or rebates to support eco-friendly and environmentally-sustainable businesses. In particular, 81% of respondents were keen on converting reward points earned on their credit cards to green credits for the adoption of renewable energy sources.
Growing sustainable appetite
On top of the increasing interest to be more sustainable, Asean consumers are seeking more information and solutions on sustainable investments. Nine in 10 respondents (91%) expressed their hope for financial institutions to provide more information about the benefits of sustainable investing and to offer more options in sustainable investment solutions. This was particularly prevalent in Indonesia (96%), Singapore (91%) and Malaysia (91%).
In Singapore, 13% of respondents already buy sustainable investment products, while another 61% say they are considering and are interested in sustainable investment products if these matched their preferred risk profiles.
“The number of customers investing in our environmental, social and governance (ESG)-linked products grew by six times since we launched them in late 2020,” Tan adds. “We expect demand to continue to grow, with more consumers looking to do good and contribute to sustainable development.”
The UOB study interviewed approximately 3,500 respondents from five Asean countries, including 1,000 from Singapore and more than 600 each from Indonesia, Malaysia, Thailand and Vietnam.
