Sustainable investment ambitions fail to reflect actions of investors
The proportion of people who are investing sustainably is significantly lagging those who are interested and would like to invest, indicating that a gap exists between investors’ intentions and their tangible actions, according to the latest Schroders Global Investor Study 2019^.
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.
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