“We’re seeing many Australians wanting to lead a more environmentally conscious life,” he said. “However, for many customers one of the barriers to purchasing eco-friendly options is the initial, upfront cost. In addition to the environmental benefit, people are also seeing potential savings benefits, especially in light of rising fuel and electricity costs.”

Morgan said those factors were helping to drive demand for electric and hybrid cars as well as retail solar and batteries.

As of June 2022, Commbank had provided $31 billion in sustainability funding to retail, business and institutional customers. In addition to its existing green home and home improvement loans, the bank launched its first green personal loans in October.

Associate professor Christina Nikitopoulos, a researcher in sustainable finance at UTS, said demand for green loans had increased substantially in the past few years.

“Green loans are a relatively new credit instrument, but with corporations trying to meet their 2030 emission targets, there’s a multimillion dollar opportunity for green finance in Australia,” she said.

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Nikitopoulos said businesses, particularly in commercial property, were the main driver, but that lower interest rates associated with green loans compared with personal loans made them increasingly appealing to consumers.

“The biggest growth area is demand from businesses with banks offering to a larger range of commercial clients," she said. "But individuals are coming on board and continuing to drive significant growth by using the funding to purchase and install energy-efficient products."

National Australia Bank noted in December that high energy costs were helping to fuel surging demand for electric vehicles, solar panels and batteries among its business clients.

The bank said business loans to finance electric vehicles and plug-in hybrids had ballooned by 900 per cent since 2020, and that loans for solar assets such as solar panels and batteries had jumped 600 per cent since 2020.

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While Commbank’s executive general manager of home buying, Michael Baumann, said last year that younger customers were especially likely to raise sustainability issues, Fennell said customers of all ages were expressing interest in sustainable ways of living.

“It’s amazing to see how far we’ve come since launching the green loans in 2002, with more customers wanting to reduce their carbon footprint than ever before,” he said. “Being environmentally conscious isn’t restricted to a single demographic.”

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