Only A Quarter Of Investors Deem Sustainability A Risk, According To Schroders
A new study published by British multinational asset management company Schroders which surveyed over 22,000 investors has claimed that only a quarter of investors are concerned that sustainable investing would risk strong returns, highlighting the growing belief that strong investment can also yield a social impact.
Schroders published its Global Investor Study 2018 earlier this month, the results of surveying over 22,000 investors from 30 countries including Australia, Brazil, Canada, China, France, Germany, India, Italy, Japan, the Netherlands, Spain, the UK, and the US. Those surveyed are investors with at least €10,000 (or the equivalent) invested over the next 12 months, and who have made changes to their investments over the last ten years. The survey found that not only are just a quarter of those surveyed concerned that investing sustainably could hinder their investment returns, but that those with self-proclaimed higher investment knowledge are more likely to invest sustainably.
Investors across Europe are the least likely to be concerned with investing sustainably, with only 23% claiming concern, while the greatest level of concern was found in Asia with 29% expressing concern with investing sustainably.
The least concerned investors overall were in Japan (13%), Denmark (18%), France (19%), Belgium (19%) and Germany (20%).
“This survey underlines the rapid growth of interest in sustainable investing,” said Jessica Ground, Global Head of Stewardship, Schroders. “The fact that 64% of investors have increased their allocation to sustainable investments in the past five years tells you how important this is for so many people.
“Specifically, it’s encouraging to see that investors no longer appear to be held back from investing sustainably by concerns that this approach may hamper returns.”
The study found that 64% of investors have increased their share of sustainable investments over the past five years, while 76% said that investing sustainably has increased in importance. Unsurprisingly, younger people — especially those considered Millennials — are more likely to have increased their exposures to sustainable investments over the past five years, with 71% of 18 to 24 year-olds and 75% of 25 to 34 year-olds increasing their exposures.
Similarly unsurprisingly, this proportion drops as you increase the age groups, dropping to 43% of investors aged 65+.
Most importantly, and as mentioned earlier, investors who consider themselves to have a higher level of investment knowledge are more likely to be investing sustainably, with those that considered themselves to have “expert” levels of knowledge saying they invest 54% of their investment portfolio sustainably. Conversely, those who consider themselves to be “beginners” only invest 33% of their portfolio sustainably, highlighting the important role investor education can have on transitioning towards a more sustainable financial system. Importantly, 57% of investors around the world said that they lack the information or understanding to invest sustainably.
“While the demographic differences were interesting, it was particularly interesting that knowledgeable investors were more likely to invest sustainably,” Jessica Ground added. “This emphasises the work the industry still needs to do to educate all investors about the potential benefits of investing sustainably.
“Clearly, barriers still remain preventing investors from embracing this approach, highlighting that the availability, transparency and advice around these funds requires improving.”
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