The second biggest barrier to investing more sustainably was the perception by 34% of respondents that sustainable investments are riskier or more volatile, with an additional 31% believing it could hinder investment performance.
In terms of engagement, the survey found that nearly two fifths (38%) of advisers do not have a framework in place for discussing clients sustainable investing preferences, opting to only discuss social investing if the client raises the subject.
In addition, from the 62% of advisers with frameworks in place, more than half of these frameworks entailed asking the client a single question (i.e. “would you like to invest sustainably or not?”).
Clients are keen to discuss SI to seek greater clarification and reassurance around the risk and return profiles of sustainable strategies and the universe of products available.
The survey revealed that advisers want more support from asset managers. More than two-thirds stated that educational seminars would contribute to continuing professional development (CPD) – almost half (46%) would like client-facing educational materials, while 42% would like more online tools or support in the initial fact-finding missions.
The challenge identifying greenwashing
Two fifths (45%) of advisers say the difficulty in spotting ‘greenwashers’ is another obstacle in advising their clients on sustainable investments.
More than a quarter (28%) of investors are also concerned that products are not as green as they promise to be.
To help combat this, Invesco has called for all funds to report the 3 Rs; Return, Risk and Responsible both in terms of the approach a fund takes and the outcome a fund achieves.
Clive Emery (pictured), Fund Manager at Invesco Summit Responsible Range, comments:
“The sustainable investing universe has grown at a faster pace than could have ever been imagined and can no longer be considered a passing ‘fad.’ We believe as awareness grows and SI is implemented into core products, the statistics from our survey will shift significantly as the conversation grows.
“The topics and issues covered by ESG are so broad and universal and our findings show that it is important to establish that there is a spectrum of sustainable solutions that exist – not a simple one size fits all approach. It’s crucial that advisers and asset managers can confidently educate their clients and ensure they understand what they are investing in.
“We know that a concerted and common effort from the investment industry – including managers and advisers – will support investors to make informed decisions and be able access the best sustainable investment options that meet their objectives today and in the future.”
