UK investors* are among the top advocates for sustainable investing globally, ranking above almost two thirds of other countries, Schroders Global Investor Study has found.
The sustainability-focused findings of Schroders’ flagship study, which has surveyed more than 23,000 people who invest from 33 locations globally, identified that just under a third (32%) of the average UK portfolio was allocated to sustainable funds.
Furthermore, just under a third of UK investors are allocating 31-50% of their portfolio to sustainable investments compared with a quarter of global investors investing the same proportion. In addition, more than half (53%) of UK investors said that a thematic approach to sustainable investing has become more appealing over the last six months, with education alongside health and wellbeing identified as the key focuses.
The research identified investors in Greece as having the lowest allocation to sustainable investments in Europe at 24%, but it is Japanese investors who stand apart from the rest of the world by some margin at only 15%. Interestingly, the country with the highest level was the USA at 38% demonstrating the scope for potential growth that remains among UK investors.
The study also identified that challenges were still impacting UK investors’ ability to invest sustainably. The biggest barrier was a lack of transparency and reported data from providers about the sustainable impact of their investments, with 51% identifying this as a key issue. In addition, almost three-quarters of the 1,000 UK investors surveyed stated that they were overwhelmed with the amount of sustainable-focused information that was available.
However, just under three-quarters (74%) of UK investors believe investing sustainably is the only way to ensure profitability in the long term. This was supported by the global findings which also found that more than two-thirds (68%) of people who class themselves as having “expert/advanced” investment knowledge believe sustainable investment is the only way to ensure profitability.
With a higher percentage of people in the UK (61%) having access to education around sustainable investing compared with 48% globally, the UK could see more “experts” emerging in the future, potentially encouraging greater take-up of sustainable investing going forward.
Doug Abbott, Head of UK Intermediary, Schroders, said:
“This study demonstrates that, for UK investors, sustainable investing is still a priority. It is therefore encouraging to see that interest is continuing to rise year-on-year as both environmental and societal challenges increasingly become issues we cannot ignore.
“We are hopeful that, as the investment knowledge of UK investors continues to rise, even more investors will seek out sustainable investments. We are committed to providing the best range of sustainable investment solutions, funds and investment trusts for both existing UK investors who are already familiar with this space, as well as for those who are yet to embrace this area.”
Andy Howard, Global Head of Sustainable Investment, Schroders, said:
““Financial education is a key element in driving more capital towards sustainable investing. It is clear from our research that what people seek is essentially guidance and clarity. The more people are able to understand the products they invest in and their impact on society and the environment, the more capital we should see flowing into sustainable investing.
“That is why, each quarter, Schroders provides an update on the themes shaping the sustainability landscape. These reports have been created to demonstrate Schroders’ commitment to integrating ESG factors into the firm’s investment processes.”
Schroders’ quarterly Sustainable Investment Reports can all be accessed here.
The full GIS report focused on sustainability is accessible here.
*This research defines “investors” as people who will be investing at least €10,000 (or the equivalent) in the next 12 months, and who have made changes to their investments within the last 10 years.”