The investment and private banking house finds that individuals across the world increasingly want sustainability-themed assets in portfolios.
A survey by private bank and investment house Schroders of more than 22,000 people worldwide finds they are increasing their focus on sustainable investing, with a significant chunk saying it has become much more important than a few years ago.
The survey of investors across 30 nations by the UK-listed firm shows 78 per cent of respondents said sustainable investing was more important to them than five years ago. Some 32 per dent said it was significantly more important and 46 per cent said it was “somewhat” more important.
Investors are increasing the share of money they are allocating to sustainable investments – 64 per cent of them have put more money into sustainable funds over the last five years.
The results said this trend appears to be stronger in Asia and the Americas than Europe, as a breakdown of results shows, Schroders said. Its report is called the Schroders Global Investor Study 2017.
Sustainable investment covers a variety of techniques, such as eliminating firms from a portfolio if they are deemed to be unacceptable, such as for harming the environment or children; actively seeking out “good” firms that bring about positive outcomes, and what is called impact investing, where money is put to work to achieve a return not entirely measureable in financial terms. Such approaches are seen by wealth managers as a way to woo the younger generation, perceived – rightly or wrongly – as being more concerned about such issues than older investors. The area remains controversial, with debate over whether such investing sacrifices potential upside, or is simply a sound way to put assets to work through the economic cycle.
When asked whether they invested in sustainable funds for the positive impact or potential profit, the average response across all fund types showed that positive impact had a greater importance (38 per cent) than profit (32 per cent). However, the proportions were similar – on average, potential profit is also seen to be an important desired outcome from investing in sustainable investment funds, as well as positive impact, such as bringing about societal, social or environmental change.
Investors said that investing in funds focusing on corporate governance was more likely to be for profit than for positive impact (37 per cent vs 30 per cent); Investing in medical science and biotechnology funds showed equal weighting between positive impact and profitability (36 per cent vs 36 per cent).