Investor Insights - what people really want from sustainable funds
23 Aug, 2022
According to new research from Boring Money, renewable energy is the most selected impact theme for both investors and savers who would consider ESG-focussed investments. With an eye to the future, big oil companies have tried to pitch themselves as those who will invest in renewable, but this message hasn’t been well received by the majority of investors. Simultaneously fund managers have to focus on persuading the average investor that engagement, not exclusion, is a sensible strategy.
62% of savers and investors would be concerned about investing in companies associated with fossil fuels, though only 35% would be very concerned
As a factor, concern has increased by 5% since last year, when 57% said they would be concerned
Female savers and investors are significantly more likely than men to say that they are concerned about investing in fossil fuels - 71% vs 57%
Young men (saver & investors under 35) are almost as concerned about investing sustainably as women in this age group (67% vs 72% respectively). However, from 35yrs onward, the gap widens as men appear significantly less concerned about investing in oil companies.
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We’ve gone quite granular on fossil fuels here, for interest. As always, the devil is in the detail, and we can help you to segment the data to map to your target audience.
However, at a higher level, general interest is there, as 61% of all cash savers and investors with more than £100,000 to invest report that they are considering investing more in sustainable investments.
As a side note, recent Consumer Duty requirements have been clear in how firms need to plan for vulnerable customers, with the definitions of vulnerability quite a low bar, as they include confidence around decision making. Sustainable investing will typically appeal more to less confident, less experienced investors.
We leave you with some food for thought. Of all cash savers and investors who would be concerned about investing in a product with any holdings in fossil fuels:
68% report low confidence (they rate themselves a 5 or below out of 10)
69% self-classify as a vulnerable customer
71% report health issues as defined by FCA criteria of a vulnerable customer
The industry – especially active managers – has embraced ESG-type investments as a green saviour and inflows have swollen. But let's consider the end investor who lies behind these inflows. There are other issues to consider which are presented by this fundamentally different cohort, whose confidence and understanding do not match their appetite or expectations.
About the Sustainable Investing Report 2022
For the past few years, the increasing awareness of ESG has been a dominant theme in Boring Moneys Sustainable Investing Report - Our annual survey explores if the focus has shifted to the bottom line in the backdrop of an inflationary environment and the invasion in Ukraine. Are retail investors committed to investing in sustainable and equitable funds? Has the energy transition entered mainstream retail investing in 2022? Are we seeing a slowdown in the commitment from investors into the asset class?
Learn more about our Sustainable Investing Report 2022.
