Investors want to do good but aren’t being offered good investments, says report
Over 60 percent of UK investors would like their investments to make a positive contribution to society and the environment, says a new survey from Triodos Bank. The report also reveals that many people struggle to find options for socially responsible investing, with 51 percent of respondents saying that they have never been offered a Socially Responsible Investment (SRI).
While the demand for more responsible and positive investment is clearly there, the lack of awareness of SRI products could show that the investment industry is not responding to the integration of investor's financial and personal motivations.
"Our research reveals that a majority of investors now want sustainable and ethical investment options," Huw Davies, head of retail banking at Triodos Bank.
"The industry must respond to this demand. Recent growth in the SRI market is positive and we want to see that growth accelerate to have greater impact in addressing social and environmental issues." said Huw Davies, head of retail banking at Triodos Bank.
When asked what areas they want to avoid supporting with their investment funds, respondents highlighted social and health issues. Human trafficking, forced labour, factory farming and weapons topped the list.
Surprisingly, environmental issues were further down the list of what to avoid, but energy topped the list when asked what investors wanted to pursue.
The survey findings also challenge the perception that ethical funds are less profitable than mainstream investments. Respondents see investing in sustainable and ethical funds as ‘smart investment’ with nearly half (47%) claiming that companies trying to make a positive contribution to society and the environment are more likely to succeed financially in the long term.
Huw added "Many investors now believe that good long-term returns can go hand-in-hand with sustainable and ethical investments,"
"At Triodos Bank, we’re providing opportunities to invest in the most progressive companies in sustainable energy, medical technology, environmental tech and corporate social responsibility."
With this awareness that investment vehicles can have social and environmental impact, more pressure is being placed on the financial industry to disclose how investor’s money is being used. Over half (53%) of respondents think that customers should be made clearly and fully aware where their money is being invested as standard. This figure is up from 50% in February.
"We see a growing awareness amongst investors that their money has an impact on the world in which we live through how it is used by banks and funds," said Huw. "We want to call on all banks and financial providers to be more transparent and open about where they invest people’s money so that investors can make informed choices. As a values based sustainable bank, Triodos Bank enables money to be used for positive social and environmental change.
"We’re committed to transparency: our investors and savers know where their money goes. Our customers can find out where their money is invested and lent via our website and they can see the benefits it brings to society and the environment at first hand."
Watch our interview with Huw Davies discussing Good Money Week and the results of some fascinating research into Socially Responsible Investments on Facebook Live.
About the survey
Triodos Bank UK Consumer Survey, conducted by Opinium Research LLP on 5 to 7 October 2016. The survey was an online interview of a nationally representative sample of 2,003 UK adults.
Ethical investments designed to shape a better future