Interest in sustainable investing is at an all-time high
New survey suggests sustainable investing is at a tipping point, but lack of measurement and transparency holding investors back.
Standard Chartered’s latest survey into the sustainable investing trends among emerging affluent, affluent and high net worth investors revealed that sustainable investing is at a tipping point, with awareness and interest at an all-time high. However, investor apprehensions – lack of measurement and transparency topping the list – are preventing sustainable investing from becoming more mainstream.
The Sustainable Investing Review 2021, the Bank’s fourth study since 2018, revealed an upward trend in sustainable investing among more than 2,000 investors, surveyed in Mainland China, Hong Kong, Taiwan, Singapore, India, the UAE and UK. The allocation of sustainable investments in investor portfolios is on the rise: 13 per cent of investors already have more than 25 per cent of total investments channelled into sustainable solutions, compared to just 2 per cent of investors in 2020.
The research identified trends across a four-stage adoption cycle:
- Awareness – 82 per cent know what sustainable investing is
- Interest – 81 per cent show interest in sustainable investing
- Intention – 40 per cent of those who have not yet invested in sustainable solutions plan to in the future
- Adoption – 61 per cent have placed funds in a sustainable investment solution
These insights, gathered amidst the ongoing pandemic and increasingly visible impacts of climate change, show that the majority of investors (72 per cent) have a growing sense of responsibility and are looking to do good with their wealth.
Crossing the tipping point
While there are positive trends in sustainable investing, investors shared a number of apprehensions that are holding them back from taking action i.e. crossing over from the stages of awareness, interest and intention to actual adoption, with lack of transparency and impact measurement emerging as the top concern:
- Transparency of impact measurement: 69 per cent need more numerical evidence of the impact being achieved from sustainable investments
- The shock of the new: 51 per cent feel sustainable investing is simply too new
- The direct donation alternative: 43 per cent believe donations can achieve a more immediate social outcome
The majority (74 per cent) of investors also indicated that they could become more comfortable with sustainable investing if advised by a financial expert on their investment decisions.
Marc Van de Walle, Global Head of Wealth Management, Standard Chartered, said: “With investor interest at an all-time high, we can expect more investment capital to move into sustainable investing solutions, presenting a huge opportunity to address pressing global challenges. To ensure we cross the tipping point, it is vital for the industry to collaborate and develop robust governance frameworks and address the concerns with transparency and measurement. At Standard Chartered, we continue to work with key stakeholders and incorporate the latest regulatory requirements as we sharpen our sustainable investing standards and framework for greater transparency.
“The findings also highlighted the crucial role of professional advice: by providing personalised advice according to our clients’ sustainability goals, and access to the most relevant sustainable investment solutions, we can enable our clients to make a positive impact, along with financial returns.”
Standard Chartered is working through the financial system to address the issues with globalisation and enable a more inclusive and sustainable world economy.