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More than 15 million investors potentially hold assets which would not meet their personal ethical preferences
69% of investors are in the dark about how ethical their investments are
- 64% of investors in the dark about how ethical their investments are
- Investors in stocks and shares ISAs and pensions are some of the least aware
- Despite a broad range of available ethical funds, just 11% are aware it's possible to invest ethically in mainstream companies
- Three quarters (74%) of investors would like their pensions and investments to be invested more in environmental and social sectors.
Failure by investors to examine the funds they hold assets in is resulting in potentially 64% of investors placing money in companies and sectors which they are ethically opposed to, according to new research from Triodos Bank.
The data, released for Good Money Week (19-25 October), shows that on average, only a quarter of investors (26%) say they are aware of the true extent to which the activities that their funds / pensions invest in are ethical or not. The research does however show that awareness is growing among UK investors, with a six per cent increase compared with the previous year (20%).
When breaking the responses down by investment type, Triodos Bank found that six out of ten of those investing in stocks and shares ISAs (62%), personal pensions (59%) and SIPPs 41% said they have little or no awareness. By contrast, those investing in offshore and onshore bonds were the most aware (67%)***.
Triodos Bank asked investors which activities would prevent them from investing in a particular company fund or pension [see table 1]. Human rights abuses (79%), pornography (56%) and arm/munitions (44%) were the three sectors which conflicted most with investors personal ethical preferences.
|Human rights abuses****||79%|
|Arms / munitions||44%|
|Fracking (shale gas extraction)||19%|
|Fossil fuels / oil / tar sands||12%|
Triodos Bank also found that 17 million UK investors (74%)** would like their investment products or pensions to be investedmore in environmental and social sectors [see table 2]. More than half (51%) wanted more invested in renewable energy, followed by 47% who would want their investments to be in invested in healthcare and 42% in sustainable business. Only one in five investors (19%) said that getting the highest returns possible is more important than being ethical, demonstrating an appetite among people to see that their money is not being used contrary to their values as well as making profits for them. However, only 11% of people are aware that it is possible to invest ethically in mainstream businesses.
|Arts and culture||18%|
Huw Davies, head of personal banking at Triodos Bank commented: ‘While it’s clear there’s strong demand from investors to support more sustainable sectors, a lack of awareness may mean their investments are actually doing the opposite, supporting industries they are ethically opposed to.
"Anyone who would rather avoid investments in unethical sectors needs to make efforts to become more aware about how their money is being used, but there is also an onus on investment providers to provide greater transparency to empower investors to do so."
The UK branch of Triodos Bank NV distributes two SRI funds (the Triodos Sustainable Equity Fund and the Triodos Sustainable Pioneer Fund) and has an ethical Stocks and Shares ISA offering which enables investors to benefit from potentially attractive financial returns, as well as being safe in the knowledge that their investments are more aligned with their personal ethical concerns. Every investment decision for the funds is only made following a rigorous research and selection process which ensures investors know that their money is invested in companies which Triodos Bank considers the best sustainability performance. Triodos’ investment research team updates its universe of investible stocks on a quarterly basis and, in contrast to other investment providers, aligned with its mission of 100% transparency, it publishes these quarterly changes.
About Triodos SRI funds
The funds are offered in the UK via SICAV I sub-funds. The UK share classes are offered in sterling. When comparing returns for these share classes to those generated for the Euro share classes offered to European investors, returns will be affected by currency fluctuations between Sterling and the Euro. In principle the fund does not hedge the currency risk of these investments.
The funds, managed by Delta Lloyd Asset Management, are both also available through the Triodos Ethical Stocks and Shares ISA. Investors can choose from distribution or capitalisation sterling share classes. The estimated Ongoing Charges are 1.25% for the Sustainable Pioneer Fund and 1% for the Sustainable Equity Fund. The minimum investment is £1,000 per fund. Initial fee of 3%. There is a minimum lump sum top-up of £500. The value of investments and the income derived from them may go down as well as up and you may not get back the amount originally invested. Past performance is not necessarily a guide to the future.
You should not interpret any information in this press release as financial advice. Any investment decision should only be made on the basis of the Prospectus or the Key Investor Information Document(s) and not on any information in this press release.
The funds are offered in the UK via SICAV I sub-funds.
About the Triodos Bank Ethical Stocks and Shares ISAs
Triodos Bank’s Stocks and Shares ISA offer the opportunity to invest tax efficient in our two Socially Responsible Investment (SRI) Funds. Customers are able to choose to invest in either one or both of our SRI Funds enabling customers to choose how their tax efficient investments are being used. The maximum tax efficient ISA allowance for 2014-2015 is £15,000, if you haven't used your ISA allowance for this year. The favourable tax treatment for ISAs could change.
Notes to editors
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About the research
(aged 18+) were interviewed online on behalf of Triodos Bank by Opinium Research between 23 and 29 September 2014. Weighted to a nationally representative criteria. Of those. 1869 have some sort of investment product.
* 64% of investors unaware of activities of their investments. 15 million figure based on survey sample of 4,013 UK adults, 1,869 of which were investors (47%).
UK census data shows 50,371,000 UK adults, 47% of this which is 23,674,370 adults. 64% of this figure is 15,151,596.
**74% of this figure is 17,519,034
*** Figure based on combined onshore (68%) and offshore bond awareness (78%)
**** Figure based on Human trafficking (73%) and forced/child labour (71%)
About Triodos Bank NVwww.triodos.co.uk
Triodos Bank only finances enterprises which create social, environmental or cultural added value. Key sectors include organic food and farming, renewable energy, social housing, and fair trade. Transparency is a core value and Triodos publishes details of every business it lends to. A range of personal savings accounts is offered, and full banking services are available for businesses and charities. Triodos Bank is an independent bank founded in the Netherlands in 1980. Its principles and independence are protected through a special shareholding trust. The UK office opened in 1995 and is based in Bristol.
Triodos Bank offers a range of personal savings accounts as well as other investment opportunities.