Investors Want to Place Funds Sustainably

According to Schroders, a global asset manager with 565.5 billion US-Dollar in assets under management, this year ESG (environment, social, governance) themes have been in the spotlight of the World Economic Forum in Davos, with the program covering topics such as ‘How to save the planet’.

According to investment writer Emma Stevenson, the reason such concerns were on the Davos agenda becomes clear in the sight of WEF’s assessment of the top global risks for 2020 (extreme weather, climate action failure, natural disasters, biodiversity loss, human-made environmental disasters). “Environmental risks now take up the whole top five global risks in terms of likelihood. This demonstrates how issues such as climate change have become increasingly pressing in recent years,” she stated. WEF’s list of risks would chime in with Schroders’ findings that environmental factors are becoming increasingly important to investors.

The Schroders Global Investor Study 2019, for example, found that 24 percent of respondents felt climate change is having, or will have, a significant impact on their investments, with a further 39 percent expecting it to have some impact. In this study, conducted in April 2019, Schroders commissioned an independent online survey of more than 25,000 people who invest from 32 locations around the globe. In this research, “people” were defined as those who will be investing at least 10,000 Euro (or the equivalent) in the next 12 months and who have made changes to their investments within the last 10 years.

Some results of the study regarding sustainability:

  • 57 percent will always consider sustainability factors when selecting an investment product, rising to 66 percent of people in Asia.
  • 61 percent of people believe all investment funds should consider sustainability factors, not just those specifically designed as “sustainable investment funds”.
  • Almost two-thirds of people (60 percent) believe their individual investment choices can make a difference in building a more sustainable world.
  • 61 percent of generation X (38-50 years old) will always consider sustainability factors when selecting an investment product, compared to 59 percent of millennials (18-37 years old). Similarly, generation X were the most likely to feel that their investments could have a direct impact in contributing to a more sustainable world (64 percent) followed by millennials (60 percent) and then baby boomers (57 percent).
  • Whilst all the UN sustainability development goals were important to people, protecting the planet from degradation was seen as the most critical, and 87 percent of people believe that climate change would impact their investments.
  • Despite the interest in sustainable investments, people still ranked financial priorities above it in importance when considering their investments – with avoiding losing money the most important, followed by meeting return expectations.

(GR12020, Page 4, Photo: TeeFarm/Pixabay)