SINGAPORE (Oct 1): There remains a gulf between people’s sustainable investment aspirations and the reality of how they prioritise these factors in their investment decision-making.
A recent survey by Schroders found that although a significant proportion of investors -- both globally and in Singapore -- clearly believe that sustainable investing is important, this has yet to translate into tangible action for the majority.
Among the findings of the Schroders Global Investor Study 2019 that led to this conclusion was that out of the 25,000 investors across the world surveyed, only 16% have invested in sustainability, compared to 32% who are interested and would like to invest this way.
Similarly, of the 549 Singapore investors surveyed, 37% said they were interested in and wanted to invest in sustainability but only 14% of those who are already investing were interested in sustainability.
When it came to the importance placed on sustainability, 28% of Singapore investors ranked it as their No 1, or No 2, priority; higher than the global average of 24%. However, like their global peers, Singapore investors still prioritise returns and financial incentives over ensuring their money is invested in sustainable investments.
Another finding unearthed by the survey was that investors who identified themselves as being expert or advanced were more likely to invest sustainably.
Of those investing sustainably in Singapore, 23% were expert/advanced investors, 9% were intermediate investors, and 5% of beginner-level investors.
Globally, just under a quarter of self-identified experts said they invested sustainably, compared to 11% of intermediate investors and 8% of beginners.
The investors surveyed also cited several external drivers that would encourage them to allocate more of their investment portfolio to sustainable funds.
About 64% of Singapore investors stated that changes to regulations encouraging them to invest more in sustainable investments would motivate them to do so, while 61% said that independent ratings confirming that the fund takes a sustainable approach would also drive them to invest this way.
Furthermore, 61% of Singapore investors felt that they would allocate more of their portfolio to sustainable investments if their financial advisers provided them with easy-to-understand information on the subject matter.
Given that a gap exists between investors’ intentions and their tangible actions, Jessica Ground, Global Head of Stewardship, Schroders, says: “This will unfortunately leave investors vulnerable to the global impacts caused by the issues such as climate change. It is important that asset managers and the broader industry – including the likes of policymakers globally – work with investors to ensure they can better identify the benefits of investing sustainably and, in turn, are able to access funds which will enable them to do so.”
