Financial advisers are one of the major keys to unlock further investment in sustainable assets according to new research from fund manager Schroders.
According to the Schroders’ Global Investor Study 2021, over a third of investors (34 per cent) would be inclined to increase their sustinable investments if their financial adviser provided more information on funds aligned with their sustainability preferences.
Other factors that would encourage people to invest in sustainable funds include data showing that investing sustainably delivers better returns, which 52 per cent of respondents ascribed to, and regular reporting showing the impact of investments on the planet (37 per cent).
“This flags a key opportunity in our eyes,” said Schroders’ investment directer, sustainability, Ella Reilly during a webinar to discuss the results.
“The advice community, they really do have an important part to play in the shift to sustainable investing, and as investment managers it’s an opportunity for us and our responsibility to ensure were providing the right levels of education and collaborating quite closely with them in this area.”
The study found that the overwhelming majority of retail investors regarded funds that consider environmental, social and governance factors as attractive, but for varying reasons. Forty-eight per cent attributed their support to “wider environmental impact”, 37 per cent said it was because ESG investments were “more likely to offer higher returns” while 32 per cent said it aligned with their “societal principles”.
Support for ESG wasn’t universal, indicating there are still pockets of resistance to the trend. Thirteen per cent said they didn’t consider ESG funds attractive because “they won’t offer higher returns” and six per cent said they “don’t align with my principles”.
The broader trend on ESG, however, remains supportive. Fifty-six per cent of Australians said they feel positive about moving to a sustainable portfolio and maintaining the same level of risk and diversification, while 87 per cent said they believed it would have a positive impact on the world.
“Investment managers and financial advisers really need to be at the forefront, as sustainable investing is going to be a key focus in the future,” Reilly said.