Schroders Global Investor Study 2019: People’s sustainable investment ambitions fail to reflect their actions

30/09/2019
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The proportion of people globally who are investing sustainably is significantly lagging behind those who are interested and would like to invest, indicating that a gap exists between investors’ intentions and their tangible actions, Schroders Global Investor Study 2019 has found.

The survey of over 25,000 investors across 32 locations around the world has found that 16% invest in sustainability, compared to 32% who are interested and would like to invest this way.

Investors in Japan (26%) were the lowest proportion globally who either already invest or want to invest sustainably, while the highest was in India (73%). Investors in Switzerland position themselves somewhere in between: Nearly every second investor always consider sustainability factors when selecting an investment product (49%).

Investors globally who identify themselves as being expert/advanced were more likely to invest sustainably. Just under a quarter (23%) said they invest sustainably, compared to 11% of self-identified intermediate investors and 8% of beginners.

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“Source: Schroders, Global data”

At global level, investing sustainably also ranked mid-table in terms of overall financial priorities. Investors instead cited the need to avoid losing money, meeting total return expectations, generating an expected level of income and reasonable fees as more important factors.

The vast majority of investors in India (87%), China (80%), Thailand (77%) and Indonesia (76%) said they always consider sustainability when investing. This compares with 40% of investors in Canada and Denmark, as well as 41% in The Netherlands, countries that, arguably, have had a focus on sustainability for longer, indicating that it is perhaps implicit to investing.

Almost two-thirds of global investors (60%) stated that changes to regulations encouraging them to invest more in sustainable investments would motivate them to do so, while 60% also said that independent ratings confirming that the fund takes a sustainable approach would also drive them to invest this way.

Andreas Markwalder, CEO Schroder Investment Management (Switzerland) AG, commented: “Schroders has a strong belief in the value that sustainable investment can create in society. Following this creed, Schroders has recently acquired a majority stake in BlueOrchard, a leading impact investor. Both companies strongly believe that we can purposefully affect positive change through sustainable investment.”

Adrian Nösberger, CEO Schroder & Co Bank AG, added: “Investors will be left vulnerable to the global impacts caused by issues such as climate change. It is, thus, important that asset managers factor this into their investment strategy. The broader financial industry along with policymakers must ensure that sustainable investment criteria are clearly defined and transparent. This is a unique opportunity for the Swiss finance centre. ”

Swiss Investors are particularly sensitive

The Schroders Global Investor Study also found that while almost two-thirds of investors worldwide (63%) believe climate change will have at least some impact on their investing but one-third (33%) feel that it will have very little or no impact. In contrast, more than a third of Swiss investors (36%) expect a significant impact on their investments because of climate change. In Europe, less than a quarter (23%) agree with this.

Almost three-quarters of investors globally (71%) believe manmade climate change is a real phenomenon that is impacting the world, including 40% who believe this impact will be ‘significant’. Again, investors in Switzerland are more sensitive to climate issues. Every second investor (50%) thinks that climate change is a real phenomenon with a significant impact on the environment.

At a country level, the highest number of doubters were investors in the US, with 7% saying they believe manmade climate change is not a real phenomenon.

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“Source: Schroders, Global data”

Generation X vs millennials

The study also found ‘Generation X’ investors worldwide are more motivated by investing sustainably than other age groups, in contrast to the common consensus that ‘millennials’ are driving sustainable investing efforts.

Instead, 61% of Generation X (38-50 years old) said they always consider sustainability factors when selecting an investment product, compared to 59% of millennials (18-37 years old) and 50% of baby boomers (51-70 years old).

Globally, Generation X were also the most likely to feel that their individual investments could have a direct impact in contributing to a more sustainable world (64%) – again a proportion greater than millennials (60%) and also baby-boomers (57%).

Perhaps, most emphatically, almost two-thirds of Generation X investors (65%) agreed that all investment funds should consider sustainability factors and not just those designed as ‘sustainable investment funds’, ahead of baby-boomers (62%) and millennials (60%).

However, millennials (27%) were the most likely generation to consider the sustainable investment of their money as the first or second most important factor.

Geographically, only 7% of investors in Japan ranked investing sustainably as their first or second priority, compared to 33% of investors in each of Indonesia and Thailand.

*In April 2019, Schroders commissioned Research Plus Ltd to conduct an independent online survey of 25,743 people who invest from 32 locations around the globe. These included Switzerland, Australia, Brazil, Canada, China, France, Germany, India, Italy, Japan, the Netherlands, Spain, the UK and the US. This research defines
“investors” as those who will be investing at least €10,000 (or the equivalent) in the next 12 months and who have made changes to their investments within the last 10 years.

Please visit our webpage with detailed information on the study.

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For further information, please contact:

Schroders

Alice West, Senior Corporate Communications Manager

Tel: +41 (0)44 250 12 26 / alice.west@schroders.com

 

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