Exclusive: Most investors could not care less about ESG and sustainability
With COP26 a few months behind us, more than half of UK investors admit sustainable investing is not a priority for them, with just under 45 per cent saying it is important and it is a priority in their investment portfolio.
In fact, less than a third of British investors say COP26 and the UK government’s stance on climate change have accelerated their ESG investment plans to pump capital into sustainable assets.
Even fewer, less than one in five, consider ESG investments to be a savvy financial strategy at present .
These are some of the main findings of a survey among nearly 900 UK-based investors by City broker HYCM, which shared the results exclusively with City A.M.
“Investors are in no rush to hop on the ESG bandwagon, potentially due to concerns surrounding greenwashing or the performance of sustainable investments,” said Giles Coghlan, HYCM’s chief currency analyst.
“At the moment, investors remain broadly sceptical about ESG, and a least in the short-term, all bets are off that we will see any immediate investor activity off the back of the COP26 summit.”Giles Coghlan of HYCM
Younger investors, however, are slightly more involved. 60 per cent among investors aged 18 to 34 said sustainable investment strategies matter to them, compared to 30 per cent aged 55 and over.
Likewise, when asked about their investment strategies for the coming year, 52 per cent of younger investors stated they plan to invest in more sustainable assets under management, in contrast to only 12 per cent of over-55s.
The recent energy crisis has made 38 per cent UK investors wary of making sustainable, green, or ESG investments. This figure rose to 58 per cent for those with investment portfolios in excess of £500,000., the trader-broker found.
Also, 33 per cent do plan to invest, or increase their investment, in green energy, such as wind power, water stocks and solar energy in the next 12 months.
“It is important not to make any sweeping statements about the ESG landscape: younger investors and those with larger portfolios are comparatively optimistic about prospects for green investment and are considering this as a keen focus in their strategies,” Coghlan continued.
“Expect this sunnier outlook to feed into the corporate mentality, as titans like Microsoft and Nike will likely be keen to establish their ESG credentials,” he added.
“In the pivot towards a greener future, renewable energy looks set to increase demand for copper, which usually enjoys a strong springtime, so this is something investors should monitor closely,” Coghlan concluded.