Investment committee conversations
The popularity of green bonds has grown dramatically in the past year. The chart below shows new...
This week is Good Money Week: seven days of raising awareness of sustainable, responsible and ethical finance. From banking to pensions, savings and investments the promoter’s aim is to help people make good money choices.
But despite increasing interest in this area, a recent survey by FundCalibre suggests the asset management industry still has some work to do to entice investors into ESG investing.
Encouragingly, poll our visitors last month revealed that 68%* of investors have already put some money into funds that invest responsibly and 63%* are either very likely or likely to do so in the future.
But what is holding back the other third of investors? Confusing terminology, a lack of choice and the perception that ESG investing is not yet mainstream enough, were among the top three answers.
When it comes picking stocks for portfolios, only 8%* of respondents said they would invest with a manager who only targets ‘good’ companies – 35%* prefer fund managers to engage with companies and improve practices and 57%* want managers to do both.
But interestingly, bad practices by a company would only put off 33%* of investors – 5%* would put up with some bad behaviour and 62%* would decide depending on what the company had actually done.
And, while fund managers last year believed that the ‘S’ of ESG would be the focus of investors in 2021, social issues were in fact last on the list of priorities among respondents. Environmental issues, followed by good governance were more popular, while the most important individual issues cited were climate change, pollution, human rights, corruption and company ethics.
The most popular funds among the survey respondents who already invest in ESG products were the Liontrust Sustainable Future fund range.
These funds use a thematic approach to identify the key structural growth trends that will shape the global economy of the future. Managed by the same team for the past 20 years, they currently invest in three mega trends: better resource efficiency, improved health and greater safety and resilience.
Mike Appleby told us more in this podcast:
The other funds making it into the top five for our survey respondents were: Rathbone Ethical Bond; BMO Responsible Global Equity; Stewart Investors Asia Pacific Sustainability; and Pictet Global Environmental Opportunities.
*Source: FundCalibre, based on answers from 63 respondents