How Covid moved views on sustainability

The Covid pandemic has intensified concerns about environmental and social issues among individuals around the world who invest.

That is one of the key findings from Schroders’ 2021 Global Investor Study. Another is that increasingly asset managers are expected to take responsibility for action over climate change.

Here, we take a glance at the sustainability sentiments from the landmark annual survey, which analyses answers from more than 23,000 savers globally.

Has Covid-19 changed your attitude to sustainability?

When it comes to the environment, respondents in Asia are most likely to say this has become more important, followed by those in the Americas and in Europe. This regional pattern also applies to the question of social issues.


Source: Schroders


Source: Schroders

How would you feel about a 100% sustainable portfolio?

The bulk of investors globally are at ease with the prospect of embracing sustainability, with 57% stating they would be happy to move to an entirely sustainable portfolio – so long as the same level of risk and diversification is maintained.

This sentiment was held across different age groups, with 18-37 year-olds, 38-50 year-olds and 51-70 year-olds (60%, 59% and 53% respectively) more enthusiastic than those over 71 (44%).


Source: Schroders

More than half (53%) of investors believe that data or evidence demonstrating that investing sustainably delivers better returns would encourage them to increase their allocations.

A further 40% of investors say that regular reporting highlighting the impact their investments are having would motivate them to invest sustainably. Just over a third (36%) would like to see some form of self-certification from the investment manager that their investments are sustainable.

Who should be responsible for mitigating climate change?

Almost three quarters of savers (74%) agree that it is the responsibility of national governments and regulators, up from 70% in 2017.

More than two-thirds (68%) believe companies are responsible, up from 63% four years ago.

However, the biggest change in expectations since 2017 concerns the role of the investment industry. More than half (53%) believe investment managers and major shareholders bear responsibility, compared to 46% in 2017.

The feeling that individual consumers and savers needed to take responsibility has held fairly constant around the 60% mark.


Source: Schroders

Note: Respondents were able to choose multiple options, which is why figures do not add up to 100%.

What would drive you to divest?

The study also asked what controversies would drive people to withdraw from investments.

Financial scandals are the most likely, with these issues creating greater investment obstacles than cyber security hacks or climate change catastrophes. Nearly two-thirds (65%) of investors state they would sell out if their investments were impacted by financial or accounting scandals.

This was ahead of 61% of investors who cite cyber hacks and 60% who identify a climate change catastrophe as reasons for divestment. Interestingly, compared with their European counterparts, people in Asia and the Americas are the most sensitive to financial scandals (61% for Europe vs 68% for Asia and 69% for the Americas).


Source: Schroders

Savers in the Americas are more likely to divest as a result of a climate change catastrophe such as an oil spill compared with investors globally (63% vs 59% for Europe and Asia).

Andy Howard, Global Head of Sustainable Investments, says that the findings have laid bare the growing expectations being placed on asset managers when it comes to addressing climate change.

“We are focusing on ensuring the investments we manage for our clients are aligned to the transition toward a more sustainable planet, and benefit from the opportunities that transition will bring.

“As investors and as guardians of our clients’ assets, we seek to actively influence corporate behaviours so that the companies in which we invest are sustainable and resilient.

“At the same time, despite this greater profile for asset managers, there is still clearly more to be done to demonstrate to investors that it does not have to compromise returns. Indeed, we see sustainable value creation as intrinsically linked to successfully navigating building social and environmental challenges.

“As investment managers, we need to ensure we give our clients the information they need to assess our performance across the areas that matter to them. At Schroders we are taking these findings very seriously. As an active investment manager, we have a responsibility to show leadership on key sustainability issues and how we are meeting our clients’ evolving needs in this area.”


Important Information: This communication is marketing material. The views and opinions contained herein are those of the author(s) on this page, and may not necessarily represent views expressed or reflected in other Schroders communications, strategies or funds. This material is intended to be for information purposes only and is not intended as promotional material in any respect. The material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. It is not intended to provide and should not be relied on for accounting, legal or tax advice, or investment recommendations. Reliance should not be placed on the views and information in this document when taking individual investment and/or strategic decisions. Past performance is not a reliable indicator of future results. The value of an investment can go down as well as up and is not guaranteed. All investments involve risks including the risk of possible loss of principal. Information herein is believed to be reliable but Schroders does not warrant its completeness or accuracy. Some information quoted was obtained from external sources we consider to be reliable. No responsibility can be accepted for errors of fact obtained from third parties, and this data may change with market conditions. This does not exclude any duty or liability that Schroders has to its customers under any regulatory system. Regions/ sectors shown for illustrative purposes only and should not be viewed as a recommendation to buy/sell. The opinions in this material include some forecasted views. We believe we are basing our expectations and beliefs on reasonable assumptions within the bounds of what we currently know. However, there is no guarantee than any forecasts or opinions will be realised. These views and opinions may change.  To the extent that you are in North America, this content is issued by Schroder Investment Management North America Inc., an indirect wholly owned subsidiary of Schroders plc and SEC registered adviser providing asset management products and services to clients in the US and Canada. For all other users, this content is issued by Schroder Investment Management Limited, 1 London Wall Place, London EC2Y 5AU. Registered No. 1893220 England. Authorised and regulated by the Financial Conduct Authority.