Schroders Global Investor Study 2019: People’s sustainable investment ambitions fail to reflect their actions

The proportion of people globally who are investing sustainably is significantly lagging those who are interested and would like to invest, indicating that a gap exists between investors' intentions and their tangible actions, Schroders Global Investor Study 2019 has found.

The survey of over 25,000 investors across 32 locations around the world has found that 16% invest sustainably, compared to 32% who are interested and would like to invest this way.

Investors in Japan (26%) were the lowest proportion globally who either already invest or want to invest sustainably, while the highest was in India (73%).

Investors who identify themselves as being expert/advanced were more likely to invest sustainably. Just under a quarter (23%) said they invest sustainably, compared to 11% of self-identified intermediate investors and 8% of beginners.

Investing sustainably also ranked mid-table in terms of overall financial priorities. Investors instead cited the need to avoid losing money, meeting total return expectations, generating an expected level of income and reasonable fees as more important factors.

The vast majority of investors in India (87%), China (80%) and Thailand (77%) said they always consider sustainability when investing. This compares with 40% of investors in Canada and Denmark, as well as 41% in The Netherlands, countries which arguably have had a focus on sustainability for longer, indicating that it is perhaps implicit to investing.

Almost two-thirds of investors (60%) stated that changes to regulations encouraging them to invest more in sustainable investments would motivate them to do so, while 60% also said that independent ratings confirming that the fund takes a sustainable approach would also drive them to invest this way.

Jessica Ground, Global Head of Stewardship, Schroders, commented:

'There remains a gulf between people's sustainable investment aspirations and the reality of how they prioritise these factors in their investment decision-making.

'A significant proportion of investors clearly believe that sustainable investing is important, but this is yet to translate into tangible action for the majority.

'This will unfortunately leave investors vulnerable to the global impacts caused by the issues such as climate change. It is important that asset managers and the broader industry - including the likes of policymakers globally - work with investors to ensure they can better identify the benefits of investing sustainably and, in turn, are able to access funds which will enable them to do so.'

Climate change

The Global Investor Study also found that while almost two-thirds of investors (63%) believe climate change will have at least some impact on their investing, one-third (33%) feel that it will have very little or no impact.

Almost three-quarters of investors (71%) believe man-made climate change is a real phenomenon that is impacting the world, including 40% who believe this impact will be 'significant'.

At a country level, the highest number of doubters were investors in the US, with 7% saying they believe man-made climate change is not a real phenomenon.

Generation X vs millennials

The study also found 'Generation X' investors are more motivated by investing sustainably than other age groups, in contrast to the common consensus that 'millennials' are driving sustainable investing efforts.

Instead, 61% of Generation X (38-50 years old) said they always consider sustainability factors when selecting an investment product, compared to 59% of millennials (18-37 years old) and 50% of baby boomers (51-70 years old).

Generation X were also the most likely to feel that their individual investments could have a direct impact in contributing to a more sustainable world (64%) - again a proportion greater than millennials (60%) and also baby-boomers (57%).

Perhaps, most emphatically, almost two-thirds of Generation X investors (65%) agreed that all investment funds should consider sustainability factors and not just those designed as 'sustainable investment funds', ahead of baby-boomers (62%) and millennials (60%).

However, millennials (27%) were the most likely generation to consider the sustainable investment of their money as the first or second most important factor.

Geographically, only 7% of investors in Japan ranked investing sustainably as their first or second priority, compared to 33% of investors in each of Indonesia and Thailand.

To find out more about the Global Investor Study and read the full report, please click here.

*In April 2019, Schroders commissioned Research Plus Ltd to conduct an independent online survey of 25,743 people who invest from 32 locations around the globe. These included Australia, Brazil, Canada, China, France, Germany, India, Italy, Japan, the Netherlands, Spain, the UK and the US. This research defines 'people' as those who will be investing at least €10,000 (or the equivalent) in the next 12 months and who have made changes to their investments within the last 10 years.

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