Environmental considerations and concern for the future are prevalent among consumers, with ONS figures revealing that three quarters (75%) of UK adults are worried about climate change.1 These concerns are spurring changes in consumer behavior, with Deloitte’s Sustainable Consumer Report 2023 revealing that, despite the ongoing cost-of-living crisis, more consumers have made changes toward adopting a sustainable lifestyle, compared with 2022. 2
At Gatehouse Bank, we have observed this first-hand among our customers. Earlier this year, the bank collaborated with the Islamic Finance Council UK (UKIFC) to distribute a survey gauging the awareness and understanding of the United Nations Sustainable Development Goals (UN SDGs) among Islamic finance retail customers.3 The survey revealed that 90% of Gatehouse Bank customers find it important for the products they purchase to align with their values and ethics and 74% said that they would be willing to pay a premium for products aligned to the UN SDGs.
Within this context, it is vital to continue raising awareness of ethical products on the market, including Shariah compliant finance, which is increasingly being viewed as a more ethical alternative to conventional banking, attracting customers from all walks of life, including those of all faiths, or no faith. Using Shariah principles as a foundation, Gatehouse Bank aims to develop products with an ethical focus and has formalized its commitment to do good for society, the economy and the environment by becoming a founding signatory to the UN Principles for Responsible Banking in 2019 — the first Shariah-compliant bank to do so.
In 2021, Gatehouse Bank conducted a survey of over 2,000 nationally representative respondents*, which revealed that consumers believe that only a third (33%) of UK companies are doing enough to support the environment and tackle climate change. With this in mind, the bank sought to design its Woodland Saver product range of fixed term deposit and cash ISA accounts, which would allow its customers to give back to the environment while enjoying competitive returns on their savings. To this day, the product line is unique in the UK market, as no other Shariah compliant provider offers a similar savings product.
The Woodland Saver accounts support the creation of new woodlands in the UK, as for every account opened or renewed, the bank plants a tree as a sapling on behalf of the customer in a certified UK woodland project. This is vital, as according to the Woodland Trust, only 13% of the UK is currently covered by woods and forests.4
The greatest challenge in designing this product range was selecting and partnering with the right organization to facilitate the tree-planting process. Ultimately, Gatehouse partnered with Forest Carbon, an organization which pioneered the idea of carbon-financed woodland creation in the UK and is leading in the field of woodland growth and peatland restoration. Working with Forest Carbon ensures that the saplings are planted in projects that are certified by the UK government’s Woodland Carbon Code, which verifies that the projects:
• Are responsibly and sustainably managed to national standards
• Are publicly registered and independently verified, and
• Meet transparent criteria and standards to ensure that real carbon benefits are delivered.
Boosting woodland growth is an important part of the effort to combat the negative effects of climate change and environmental degradation. It also offers a host of other benefits to the environment and the community, which are aligned to the UN SDGs, particularly Sustainable Cities and Communities (SDG 11), Climate Action (SDG 13) and Life on Land (SDG 15):
• Boosting biodiversity
• Flood mitigation
• Reducing air, water and soil pollution
• Carbon sequestration (according to Viessmann, the average tree could absorb around a tonne of carbon dioxide (CO2) over its lifetime)5
• Providing employment in the local area, and
• Improving community wellbeing through green spaces.
Since the Woodland Saver accounts launched in 2021, Gatehouse Bank customers have helped plant over 38,000 trees at four key woodland projects across the UK: Jon’s Wood in County Durham, Lowther Whale in Cumbria, Wester Coshieville in Perthshire, and Talla & Gameshope (Phase 2) in Moffat, Scotland.
The trees planted in Lowther Whale have created a natural habitat for red squirrels, whose numbers had been dwindling in the area. Due to this project’s use of sensitive forest management practices, red squirrels are now thriving in the area and the habitat is expected to flourish as the new woodland matures.
*The survey was commissioned by Gatehouse Bank and carried out by Opinium, which sampled 2,000 nationally representative respondents from 08/01/2021–11/01/2021.
Gatehouse Bank is a Shariah compliant UK challenger bank which offers a range of ethical savings products and finance for UK residential and commercial real estate. In line with the Shariah principles of transparency, fairness and ethical venture, Gatehouse Bank aims to provide responsible, ethical and sustainable finance products in the UK.
- ONS: https://www.ons.gov.uk/peoplepopulationandcommunity/wellbeing/articles/threequartersofadultsingreatbritainworryaboutclimatechange/2021-11-05
↩︎ - Deloitte Sustainable Consumer Report 2023: https://www2.deloitte.com/uk/en/pages/consumer-business/articles/sustainable-consumer.html ↩︎
- UKIFC: https://ukifc.com/islamic-finance-global-survey/ ↩︎
- The Woodland Trust: https://www.woodlandtrust.org.uk/blog/2018/04/woods-forests-facts/ ↩︎
- Viessmann: https://www.viessmann.co.uk/en/heating-advice/boilers/how-much-co2-does-tree-absorb.html ↩︎
