More retail banks have responded to concerns about climate change by building sustainability into their digital transformation programs, according to a new report from Boston Consulting Group.

About 75 percent of retail banks plan to increase spending on environmental, social, and governance initiatives, BCG said in a statement, and almost 20 percent plan to increase spending significantly. BCG released the findings in the report “Global Retail Banking 2022: Sense and Sustainability.”

The global study found that 25 percent of retail banks identified ESG as a primary focus area for their digital transformation, and another 38 percent of retail banks said ESG was among the key criteria considered when selecting and prioritizing digital transformation initiatives.

And almost half of retail banks have a primary focus on environmental sustainability issues, BCG said, including reducing energy consumption in offices.

BCG sees opportunities for increased revenue related to sustainability initiatives.

“Sustainability has moved up the priority list for all stakeholders, making it the next frontier of competitive advantage for retail banks and a pillar for future growth,” Thorsten Brackert, a BCG partner and director and coauthor of the report, said in the statement. “In addition to promoting sustainable behaviors by customers, ESG-related products could generate considerable returns for retail banks. A 20 percent ESG-related share in new retail banking revenues in the next five years, for example, would result in about a 10 percent share of total retail banking revenues – or about $300 billion – in 2025.”

BCG also pointed out that customers’ trust in their banks has increased since the start of the pandemic, with 20 percent more people saying their trust had increased, according to BCG’s 2021 retail banking consumer sentiment survey. BCG said that across industries, 73 percent of consumers have changed buying habits related to the environment, and almost all Millennials have an interest of some kind in sustainable investment.

BCG also identified opportunities for sustainable products, including green mortgages, which provide discounts to purchasers and builders of energy efficient properties. Daily banking relationships can also be used to support customers in environmentally friendly and ethical living, BCG said, noting that in the U.S. and U.K., almost 90 percent of consumers want brands to help them become more environmentally friendly.

“Retail Banks have a critical role to play as societies and their institutions address social and environmental challenges,” Sam Stewart, global leader of BCG’s retail banking segment and coauthor of the report, said in the statement. “As they consider a redirected future, retail banks should ask themselves a couple of existential questions: What will our customers be looking for beyond straightforward financial products and services in the next few years? And how can we align our business goals with meeting those needs before our competitors do so first?”