Investors want more transparent sustainable funding opportunities

New research from ethical investment specialists Triodos Bank has revealed that investors in the UK want to increase ethical investment prospects and enhance socially responsible investment (SRI) opportunities, despite many feeling that they don’t have the opportunity to do so.

A survey of 2,003 investors revealed that 62% want to invest in companies that are both profitable and make positive environmental and social impacts. Despite this, more than half (51%) say they have never been offered the opportunity to invest in socially responsible investment (SRI) funds.

The majority of investors want their money to make a positive change to society and the environment but many have never been offered opportunities to invest in SRI funds, according to research released by Triodos Bank today, at the beginning of Good Money Week.

Six out of ten (58%) in the survey thought that people should invest their money where it can support companies that make a positive contribution to society, to people and the environment. When talking about their own investments, 62% of investors said they would like their money to support companies which are profitable and make a positive contribution to society and the environment.

The survey marks Good Money Week (30 October to 5 November 2016), the national campaign to raise awareness of sustainable, responsible and ethical finance. It found that UK investors are looking for new ways to use their money for good. More than half (53%) like the idea of investing in pioneering investment funds and supporting companies that contribute to creating a positive society and sustainable environment. This supports the view that money is a powerful form of democracy in today’s society, as where people spend, save and invest their money is a vote for their values and increasingly has an impact on the shape of society.

The survey findings also challenge a perception that ethical funds are less profitable than mainstream investments, as survey respondents see investing in sustainable and ethical funds as ‘smart investment’ and nearly half (47%) believe that companies trying to make a positive contribution to society and the environment are more likely to succeed in the long term.

Indeed, over the last three and five years the FTSE All World (ex-fossil fuel)*has outperformed the FTSE All World index, and this year the MSCI SRI index has outperformed the MSCI World index (YTD)**.

The Socially Responsible Investment (SRI) market is now worth over £15 billion in the UK, up from £12.2 billion over the last three years. The total assets under management in the UK amount to £5.7 trillion***.

The demand for more responsible and impactful investments is clearly there, and it is needed to help address global social and environmental challenges we all face, however, 51% of investors surveyed have not been offered sustainable and ethical investment opportunities, and 46% would not know where to go to find out more about them.

Huw Davies, Head of Retail Banking at Triodos Bank UK said, “Many investors now believe that good long-term returns can go hand-in-hand with sustainable and ethical investments. Our research reveals that a majority of investors now want sustainable and ethical investment options, and the industry must respond to this demand. Recent growth in the SRI market is positive and we want to see that growth accelerate to have greater impact in addressing social and environmental issues. The Triodos Sustainable Pioneer Fund invests in leading innovative and pioneering companies, delivering an average of 11.6%**** return on investment over the last three years. At Triodos Bank we’re providing opportunities to invest in the most progressive companies in sustainable energy, medical technology, environmental tech and corporate social responsibility.”

The Triodos Sustainable Pioneer fund is a global equities fund investing in small and medium-sized listed companies – for example, leading wind turbine manufacturer, Vestas, medical equipment manufacturer Smith and Nephew, and bicycle manufacturer Shimano – focused on the sustainable themes of climate protection, healthy living, clean planet or are pioneers in corporate social responsibility.

Top things investors want to invest in for positive impact

Given the choice, they want to invest in healthcare, energy efficiency and renewable energy, themes that are reflected in the Triodos Sustainable Pioneer Fund.

Investors are in the dark on where their money is invested – and they call for greater transparency

Many investors are in the dark about where their money is invested, with nearly half (47%) saying they do not know which companies or industries are supported by their investments.

Investors want banks and financial industry to be more transparent, and also offer more SRI options

Investors call on banks and other financial providers to be more transparent when it comes to disclosing where their money is being invested and also offer more SRI options. 53% of investors think that it should be standard that customers are made clearly and fully aware where their money is being invested. More than half (60%) think everyone should be offered socially responsible, or ethical and sustainable options as standard in auto-enrolment workplace pensions.

Huw Davies continued: “We see a growing awareness amongst investors that their money has an impact on the world in which we live through how it is used by banks and funds. We want to call on all banks and financial providers to be more transparent and open about where they invest people’s money, so that investors can make informed choices. As a values based sustainable bank, Triodos Bank enables money to be used for positive social and environmental change.

“We’re committed to transparency: our investors and savers know where their money goes. Our customers can find out where their money is invested and lent via our website, they can see where their money goes and the benefits it brings to society and the environment at first hand.”


Share Button