Sustainable investment ambitions fail to reflect actions of investors
The Schroders Global Investor Study, which garnered the views of more than 25,000 investors in 32 locations around the world, identified that 16% of people invest in sustainability, compared to 32% who say they are interested and would like to invest this way. These findings were similar in Australia with 45% of respondents reporting they already invest sustainably or would like to.
Should all funds consider sustainability factors?
The research found that a majority of investors believe fund managers should be automatically investing sustainably. Nearly two-thirds (61%) of investors thought all investment funds should consider sustainability factors, not just those specifically designed as "sustainable investment funds".
Investors were also asked about the various approaches to sustainable investing. The definitions for each are shown in the chart below, together with the results.
To achieve their goals, investors thought a “responsible” or best-in-class approach was the most important method (40%) when investing sustainably. An “integrated” approach (39%) was the next most favoured method, followed by a “screened” approach (21%).
Source: Schroders Global Investor Study 2019
Jessica Ground, Global Head of Stewardship, Schroders, commented that it is important for the industry to note that most investors favour a consideration of ESG factors (environmental, social and governance) from all funds.
“Clients are clear they don’t want investments that operate in a vacuum, the majority are looking for ESG integration as standard,” she said.
“They also want asset managers to hold companies to account, particularly on issues like climate change and water shortage. “That is why we have set a target for all of our investors at Schroders to be systematically integrating and engaging on ESG by the end of next year.”
Chris Durack, CEO Australia, Schroders, said “These results show that Australians have a definite interest in investing sustainably, however there is also the perception that sustainable investing may mean foregoing investment returns. Clearly there is a role here for further education.”
^Schroders commissioned Research Plus Ltd to conduct an independent online survey of 25,743 investors in 32 locations throughout the world, with fieldwork held between 4th April – 7th May 2019. 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; these individuals represent the views of investors in each country included in the survey.
- Finding income in changing markets
- The hunt for income– three things to look for
- Tread carefully as the monetary safety net weakens
- A two-minute guide to diversification and the benefits of it
- Markets priced for perfection in an imperfect world
- Unknown unknowns put recovery at risk
This material has been issued by Schroder Investment Management Australia Limited (ABN 22 000 443 274, AFSL 226473) (Schroders) for information purposes only. It is intended solely for professional investors and financial advisers and is not suitable for distribution to retail clients. The views and opinions contained herein are those of the authors as at the date of publication and are subject to change due to market and other conditions. Such views and opinions may not necessarily represent those expressed or reflected in other Schroders communications, strategies or funds. The information contained is general information only and does not take into account your objectives, financial situation or needs. Schroders does not give any warranty as to the accuracy, reliability or completeness of information which is contained in this material. Except insofar as liability under any statute cannot be excluded, Schroders and its directors, employees, consultants or any company in the Schroders Group do not accept any liability (whether arising in contract, in tort or negligence or otherwise) for any error or omission in this material or for any resulting loss or damage (whether direct, indirect, consequential or otherwise) suffered by the recipient of this material or any other person. This material is not intended to provide, and should not be relied on for, accounting, legal or tax advice. Any references to securities, sectors, regions and/or countries are for illustrative purposes only. You should note that past performance is not a reliable indicator of future performance. Schroders may record and monitor telephone calls for security, training and compliance purposes.