UK investors to increase socially responsible investment exposure

We have commissioned some research into investor attitudes towards Socially Responsible Investing. Here are some of the key findings.

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  1. Rob Morgan
  • Almost half of UK investors (48%) expect to increase their exposure to ESG investments over the next three years
  • Nearly one fifth (18%) of UK adults expect to significantly increase their exposure to SRI/ESG
  •  But three in five (60%) self-identified ‘DIY investors’ admit they’re not aware of SRI/ESG

 

Almost half of UK investors (48%) expect to increase their environmental, social and governance (ESG) investments over the next three years, with one in six (17%) planning to do so significantly, according to new Charles Stanley Direct research.

Our findings highlight the growing role that Socially Responsible Investing (SRI) is currently playing among UK investors, as well as the growing awareness of both SRI and ESG.

Among the UK adults currently with an investment portfolio surveyed, 43% say they have exposure to either SRI or ESG. There is also a clear trend among age demographics, with younger investors much more likely to have SRI/ESG exposure. On average, 64% of those aged 44 and under, currently with an investment portfolio have exposure to this type of investment. This falls to 31% among those aged 45-54 and then further to 15% among those aged 55 and over have said the same.

Nearly one in five (19%) UK adults say their awareness of SRI/ESG has increased over the last 12 months, and a similar proportion of respondents (18%) expect to significantly increase their exposure to SRI/ESG over the next three years. But there is much work to be done if the potential of SRI/ESG is going to be realised. Almost two thirds (60%) of self-identified ‘DIY investors’ surveyed admit they were not aware of SRI/ESG.

The most popular key factors for choosing SRI/ESG among those currently with an investment portfolio surveyed are: creating a more sustainable world for future generations (38%), delivering better returns (26%), and influencing company behaviour (24%). But the findings are clear that the key to unleashing the power of SRI are delivering on both profits and principles.

Among the UK investors that do not have SRI/ESG represented in their portfolio surveyed, the top factors that would induce a change are revealed to be a more attractive yield (32%), lower fees (17%), and tax incentives (13%). However, around a quarter of this cohort remain resistant, with 28% saying that nothing would prompt them to add SRI/ ESG to their portfolio.

There continues to be a significant movement toward SRI among UK investors. But while awareness and appetite are increasing, more needs to be done to complete the shift from niche investing to the mainstream. It’s in response to this demand that we’ve introduced our new ‘Investing with Conscience’ knowledge hub.

Not only is it important that returns from SRI are able to adequately contribute to a long-term investment strategy, it’s also essential to demonstrate the positive impact this type of investing can have. This comes through more transparency, better reporting, and a more informative and user-friendly investment portals. Getting this right will enable investors to put their money to work, safe in the knowledge that it’s delivering for the global good as well as their financial future.

The ‘Investing with Conscience’ knowledge hub provides valuable background information for those wanting to educate themselves on the subject. Investors in any of the seven SRI funds held on the Charles Stanley Foundation Fundlist will benefit from a platform fee waiver until 12th July 2020.

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