What retail investors say about ESG and Ethical Investing

Summary: Help Them Buy Your ESG Funds

  • Surveys show retail investors still doubtful of ethical investing – but not why they feel this way.
  • Digital communities offer real-time insights of engaged investors. 
  • Social listening was used to dig deeper into investor beliefs on ESG.
  • Investors reveal why they choose to buy ESG products – and raise three consistent objections.

Are retail investors buying into ESG?

‘Good Money Week’ is an annual week-long campaign, held by the UK Sustainable Investment and Finance Association. It raises public awareness to sustainable investment practices, and support the association’s members in promoting their ESG products and services. 

UKSIF commissioned FinText to provide bespoke market research on investor attitudes towards sustainable investing:

“We wanted to discover whether private investors are speaking the same language as sustainable finance providers and ask if these types of strategies are really making it into the mainstream. Or is the industry still in a bubble?” 

Key findings reveal

Among the three terms (ESG, SRI and ethical), ESG is the most common, appearing at least once in 86% of the
conversations analysed. Ethical Investing appeared in 51% of the conversations, and SRI in 34% of the
conversations

A YouGov survey showed that only 9% of the public think it’s important to invest money ethically, and 84% are willing to accept investing in something that was unethical or countered their beliefs.

The FinText research helped UKSIF delve deeper into the resistance to investing ethically, and finds 3 consistent objections:
1) Lower returns – appearing in 43% of conversations.
2) Qualifying criteria – appearing in 34% of conversations.
3) Lack of impact – appearing in 28% of conversations.

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