The rise of ESG investing into the mainstream
The trend for more sustainable investment is gaining momentum.
While there have always been investors keen to match their money with their morals, sustainable investment remained a somewhat niche interest up until a few years ago. Due to recent global events this year with the coronavirus pandemic and demonstrations over racial injustice, investors are predicted to take an active interest in how their money is invested.
The move towards a more responsible approach has previously been led by institutional investors, such as pension funds and investment foundations. As wider society has become much more conscious of environmental and social issues, retail investors have come on board too. As a result, the money flowing into sustainable investments has grown considerably – as has the number of funds.
The coronavirus pandemic may accelerate this development further. FundsNetwork’s own research into how advisers are adapting to the crisis shows that 47% of advisers expect to increase their use of ESG and sustainable strategies in response to the pandemic.
Clients are more aware of the impact reduced human activity has had on the planet and are keen to support businesses that have an ESG focus.Respondent to ‘How the advice sector is responding to the coronavirus crisis’
Interestingly, women appear to be at the vanguard of more mindful investing. Over half of advisers in our Financial Power of Women survey said that women tend to be more interested in investing responsibly than men.
You can find more about the growth of sustainable investing in our Adviser Guide.
Important Information - Please note that the value of investments and the income from them can go down as well as up so your client may get back less than they invest.