Bridging the sustainability gap, from appetite to action – Fidelity International

by | Oct 3, 2022

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While one in five (20%) UK adults are already choosing to primarily save and invest in ways that are sustainable, research from Fidelity International suggests even greater appetite amongst consumers to do so.

To begin Good Money Week (3 – 7 October), Fidelity has issued research showing that nearly half of UK adults (48%) believe people can positively change the world through the financial decisions they make about where to save and invest.

Fidelity’s study reveals 46% of UK adults want their money to make a positive change in the world, while 30% said events of the last year have made them want to invest or save their money more sustainably, rising to 42% of those aged 18-34. However, there is more to be done to turn this intention into action, with a gap between appetite and engagement with ESG (Environmental, Social and Governance) solutions.

Three-fifths (59%) of UK adults have not heard of ‘ESG investing’ before, and this persists amongst investors, with a third (34%) unfamiliar with the phrase. This lack of awareness increases with age, with the majority of respondents (69%) aged 40 and above not having heard of ‘ESG investing’.

Emma-Lou Montgomery, Associate Director for Personal Investing at Fidelity International, comments: “Our recent research highlights the importance of ‘joining the dots’ between people’s enthusiasm for sustainable causes with the practical steps they can take to align their finances with their values. With relatively low awareness of the options available, this leaves a significant proportion of people who want their money to have a positive impact but are not currently aware of how to do so.

“The key to unlocking sustainable investment is showing people how they can turn intention into action. Global issues, like climate change, are at the forefront of minds and there is a significant proportion of people who want to do more to influence change. But, so far, sustainable investing and the benefit it could have on these issues hasn’t fully translated.”

Fidelity’s research shows climate change is top of the list (56%) of issues people who want to make a positive change in the world want to tackle – rising to 67% of over 55s. Other prominent issues include poverty and homelessness (37%) and combatting unsustainable consumption (32%).

Emma-Lou Montgomery continues: “Now is the time to harness people’s appetite to do good in the world. We need to give people the choice to match where they put their money, be that savings, investments, or a pension pot, with the causes that are important to them. It is our responsibility to showcase that choice and at the same time, provide clarity.

“Fidelity has launched a Sustainable Investment Finder tool to help our customers do just that, enabling investors to align their investments with the issues that matter to them.”

Emma-Lou Montgomery provides her top tips for investors who want to start saving sustainably:

1.  Review your current investments’ fund sheets: “If you are looking to review how ‘green’ your portfolio is, the first thing you should do is examine the fact sheets of the funds you are currently invested in. These will provide an in-depth look into the fund, including information on the top holdings, regions and sustainability ratings and characteristics.

2.  Ask yourself what your goals are: “When reviewing your current holdings, some questions to keep in mind are whether you personally agree with the companies the fund invests in – for example, whether there are certain companies or industries you want to exclude completely – and/or if it can evidence cases where they’ve held companies to account through engagement and voting activities. The answers to these questions should inform both your head and your heart, enabling you to decide whether the fund is right for you.”

3.  Consider your risk appetite – and review regularly: “As you would with any investing decision, it’s worth reviewing your holdings within the context of your overall investing objectives, keeping in mind how any decisions you make could impact your risk appetite and the time you plan to remain invested. Finally, as the world around us is constantly changing, it’s worth reviewing your sustainable investments on a regular basis to make sure they continue to align with your preferences and are suitability weighted towards your goals.”

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