The Truth behind consumer interest in sustainable investments

By George Critchley, chairman, True Bearing Chartered Financial Planners.

There has been much discussion amongst Independent Financial Advisors (IFAs) claiming that less than 10 per cent of their investors are interested in considering ESG (Environmental, Social and Good Corporate Governance) and sustainable investments.

However following a recent survey by True Bearing, the outcome painted a very different picture.

The survey was commissioned in July of last year, looking into the current consumer attitudes to these investments and the results indicated that a much higher proportion of investors surveyed, would invest in ESG options.

Responsible for the management of funds worth hundreds of billions of pounds annually, IFAs play a vital role in influencing the market.

We understand that positive shifts influenced by IFAs can have a significant impact to world challenges. Together with our clients, we should be doing our bit to help the planet for the future of our children.

Statistically, the current ESG investment market reflects a very small 3 per cent.

The survey was designed around nine questions and 167 investors were invited to respond, of these, 72 (43.1 per cent) completed the questionnaire.

The survey results illustrated that 76 per cent of those that responded explicitly wanted their investments to have a positive impact and avoid damaging effects.

Assuming those that did not respond were not interested in ESGs, the survey suggested that 32.9 per cent of the investing public want to invest in positive investments.

So why do actual investments only total 3 per cent - are most IFAs behind the times? Why do attitudes contrast with current figures?

The survey showed that the majority of IFAs are not only behind the times, but missing a trick.

They are part of the problem, by not providing a route for their clients to fulfil their objectives. These figures suggest that IFAs are missing out on a large market share, of those keen to take up ESG investments.

The survey asked the investors if there was a perceived greater risk when thinking about ESG investments. However, the majority stated this was not the case.

Put simply, if their IFA made it easy and straightforward for them, they would invest at least some of their monies in a positive manner.

We believe that the results show a degree of certainty, that a change has taken place in the attitudes towards positive solutions and are now part of the everyday market process.

IFAs need to take on board these changes in public opinion and offer sustainable assets to their client investment programmes.The value of investments and any income from them can fall as well as rise. Investors may get back less than they invest.