Schroders Global Investor Study: Sustainable investment ambitions fail to reflect actions

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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 survey of over 25,000 investors across 32 locations around the world has found that 16% invest in sustainability, compared to 32% who say they 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%). In Australia, 45% of investors reported they already invest sustainably or would like to invest sustainably.

Worldwide, investors 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.

 

 

Nevertheless, the study found there is a demand for sustainable investing and investors believe that their choices can make a difference. Globally, 61% of investors believe all investments should take a sustainable approach, and 60% think their individual investment choices can make a difference to a more sustainable world. These findings were similar in Australia, where 64% of investors believe all investments should take a sustainable approach, and 62% believe their choices can make a difference.

However, investing sustainably only ranked mid-table in terms of overall financial priorities with investors worldwide. 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.

 

 

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

Jessica Ground, Global Head of Stewardship, Schroders, commented: “There remains a gulf between people’s sustainable investment aspirations and the reality of how they prioritise these factors in their investment decision-making.

“A significant proportion of investors clearly believe that sustainable investing is important, but this is yet to translate into tangible action for the majority. “This will unfortunately leave investors vulnerable to the global impacts caused by the issues such as climate change. It is important that asset managers and the broader industry – including the likes of policymakers globally – work with investors to ensure they can better identify the benefits of investing sustainably and, in turn, are able to access funds which will enable them to do so.”

Chris Durack, CEO Australia, Schroders, commented: “These survey results show 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.”

“Focusing on the evidence will help investors understand that, far from detracting from total returns, high quality investment approaches that integrate sustainability can actually help ensure that total returns remain competitive.”

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