A majority of female clients want their investment decisions to consider environmental, social and governance (ESG) factors, even if this could narrow their investment options, new research from Quilter Cheviot has found.
In a survey of approximately 2,000 of its female clients, Quilter Cheviot found that 53% agreed ESG factors needed to be considered, compared to just 7% who disagreed. Four in ten (41%) had a neutral view on the topic.
Of those that did want to consider ESG factors, the primary reason to do so was to have a positive impact as well as generate financial returns, with nearly two-thirds providing this reason (64%). Wanting to contribute to the global need for sustainable development (59%) and improving the world for future generations (58%) were also popular responses.
Interestingly more than a third (37%) want to ensure their investments are considering ESG factors as a way of mitigating risk and maximising returns, highlighting that some clients understand that considering ESG factors does not necessarily mean investing sustainably or ethically.
| What are your main reasons for making investments that consider environmental, social and governance factors? | |
| To have a positive impact as well as financial returns | 64% |
| Contributing to the global need for sustainable development | 59% |
| Improving the world for future generations | 58% |
| Ensuring all aspects of an investment are considered including environmental, social and governance factors to minimise risk and maximise returns | 37% |
| Aligning to the current movement to invest more responsibly | 21% |
| Holding companies to account through engagement and voting | 16% |
| Aligning to wider family values | 13% |
| Responsible investing generates financial opportunity | 11% |
Source: Quilter Cheviot
More than half of the respondents also feel that men and women’s attitudes to investing differ, with 59% saying they do by either a moderate amount or a great deal. Just 15% believe they do not differ at all.
Gemma Woodward, head of responsible investing at Quilter Cheviot, said: “From speaking to our female clients, it is clear that considering ESG factors as part of the investment process is becoming the norm. We are reaching a point where investors expect it to be done as standard as it is simply just good practice and prudent management of money. While a large minority have no view on the matter, the fact so few do not want ESG factors considered gives an indication of the sort of conversations female investors are wanting to have with their advisers and investment managers.
“What is really pleasing to see too is that a good number of female investors understand that considering ESG factors is about risk mitigation and not necessarily investing sustainably. We have seen the terminology around this area be used quite lazily by the industry and this has led to confusion and misunderstandings when it comes to investment performance and expectations. However, it is clear that we are seeing some cut through on what ESG is and we now need to build on this, particularly in light of upcoming regulations.
“The data has also made it clear that many female investors have set out with some very noble intentions and want their money to help deliver positive change for the world and future generations. While financial returns will more often than not remain the primary objective of a client, it is imperative that secondary objectives are known and understood as investors want to do more with their money.”
