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Corporate 30.10.2019

Understanding consumer demand for sustainable investing

Understanding consumer demand for sustainable investing

In 2018, UBP joined the Cambridge Institute for Sustainability Leadership’s (CISL) ‘Investment Leaders Group’, a global network of pension funds, insurers and asset managers committed to advancing the practice of responsible investment.

Last week, CISL published a study led by a University of Cambridge team showing that when given clear social and environmental performance data, consumers display an appetite for sustainable investment even with lower returns. The study simulated real-world investment scenarios, thus offering a unique, science-based rating format to help people easily understand the sustainable performance of funds.

Key findings of the study included the following conclusions:

  • There is a strong preference for sustainable investing even with a 2–3 per cent sacrifice in returns.
  • Participants in the under-35 age range and inexperienced savers had a stronger preference for sustainable investment, while income, gender and education had no effect on preference.
  • There was stronger preference for avoiding funds with poor sustainability ratings than for actively choosing funds with high sustainability records, indicating avoiding negative environmental and social impacts is more influential in decision-making than the pursuit of positive impacts.

The study shows that people want more from their capital than only financial returns. Given the right information they will avoid investments which harm people or the environment. In the real world most savers are not provided with that information; meaning they are unable to make positive choices. Given what we know about climate change, destruction of nature and high levels of inequality, that needs to change.

says Jake Reynolds, Executive Director, Sustainable Economy, CISL.

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