Four years ago, the Paris Agreement was adopted, it was the hottest year since records began and both America and Britain voted for sweeping political changes. Amidst this backdrop of increasing climate activism and social transformation, Triodos started to commission an annual survey of 2,000 British adults, gauging their thoughts on investing to benefit people and the planet.
Since 2016, there’s been a growing awareness of, and interest in, this powerful form of investing. This has helped to fuel the growth of the global impact investing market, which according to the GIIN (Global Impact Investing Network) is now worth USD 715 billion, of which $5.8 billion (€4.9bn) is held by our investment arm, Triodos Investment Management, in assets under management, with more than 750 investments worldwide.
But what differences or indeed similarities have we seen in those surveys since 2016? Do we see a rise in awareness of impact investing and a growing appreciation for what it can offer in terms of both in a financial return and positive change?
A call for greater clarity
The strongest growing trend is in people’s desire for greater knowledge and transparency about where their money is invested. From 59% wanting greater transparency in 2016 to 73% in 2020, rising to 81% for people aged 55 or over.
Also 47% of investors didn’t know where their money was invested in 2016 and this grew to 55% in 2017. By this year, we asked if people would like to know what their money was invested in and 66% agreed.
However, this trend also highlighted a growing lack of knowledge on how to find this information – from 46% in 2016 to 61% in 2018 stating that they simply didn’t know how they could get clarity. In 2019, 60% agreed that investment providers aren’t helpful when it comes to revealing what your money is investing it and this rose to 75% amongst young investors (18-24 years).
“It’s distressing to hear that so many people are finding a lack of transparency in their investments, and that this has got worse, not better since 2016 when arguably the call for greater transparency has increased,” said Gareth Griffiths, head of retail banking at Triodos Bank UK.
“Investors should feel informed and empowered. I’m proud that our investors can access that information on our funds easily from our website and the impact of the investments in those companies are reported and published – so you can clearly see the impact you’ve helped to achieve,” he continues.
Where, how and why you invest matters
In the last four years, growing public awareness stemming from campaigns such as ‘Make My Money Matter’ driven by Richard Curtis and powerful films such as ‘Our Planet: Too Big to Fail’ with David Attenborough has encouraged more and more people to question where their investments are held and what are they supporting.
This is reflected in the Triodos annual survey results, alongside a growing interest in transparency – only 53% of people in 2016 confirmed their support for investments that are focused on positive societal or environmental outcomes. By 2019, this had risen to 66%. Then the climate change strikes and increased media coverage of the climate emergency led to a rising movement towards impact investing, with more UK investors claiming they would move their money to an ethical fund as a result of news about the environment. Over three-quarters (78%) of younger investors, aged 18-24, confirmed they would be prompted to move their money to an impact investment fund in response to the climate emergency.
Our 2020 survey found that awareness of impact investing is significantly higher than in any other year since the survey began. In addition, the Covid 19 pandemic is driving the current growth in ethical investing as a whole.
“In just four years, we find ourselves in 2020 in a very different place, so I am not surprised by this confirmation that more people are considering impact investing and have a greater appreciation of the power it has”, says Gareth.
He concludes: “Where we invest and what we invest in matters and while Triodos has been saying this for 30 years it really feels there is now a wider consciousness of its importance. Where do we go from here? What will even the next four years bring? The hope is that while some cynics questioned the future of impact investing four years ago, with this growing groundswell of support we should perhaps question the future of traditional investments that have no positive impact on society and the environment.”