Annual Triodos Bank UK Impact Investing survey reveals:
- Eight out of ten (79%) UK investors want to see a fairer and more sustainable society.
- Two thirds (67%) say that for the economy to succeed in the long term, investors need to support progressive and pioneering businesses tackling the big issues we face.
- Two thirds (64%) of investors would like their money to support companies which are profitable and at the same time make a positive contribution to society and the environment.
UK investors want their money to create positive social and environmental change by investing in progressive and pioneering businesses, according to the Impact Investing survey by Triodos Bank UK, released today. Yet while demand for positive investments is growing, two thirds (67%) of investors have never been offered ethical or sustainable investment opportunities.
Heralding the start of Good Money Week (8-14 October 2017), the national campaign to raise awareness of sustainable, responsible and ethical finance, the survey reveals a widespread desire for change, with eight out of ten (79%) investors saying they want to see a fairer and more sustainable society. Most believe that business, not government, has the answers:
- Over half (55%) believe businesses have the power to solve many of the biggest challenges the world faces today.
- Nearly three quarters (71%) say businesses have the power to create positive social and environmental change.
- By contrast, half of those surveyed (50%) said the Government seems powerless to change society for the better - rising to 60% of the over 55's.
Bevis Watts, Managing Director of Triodos Bank UK, said:"Our survey shows that an overwhelming majority of UK investors increasingly recognise the power of money to be a powerful tool for change.
"They know they can exert a positive influence on our wider society by simply channelling their investments into things that benefit not only themselves but also the world around them. They are looking for investment opportunities that allow them to support pioneering and innovative companies making a positive difference, while receiving good long-term returns.
"Triodos Bank actively seeks out such companies and provides opportunities to invest in groundbreaking environmental technologies that are contributing to a more sustainable future for all."
Triodos Bank offers two award-winning Socially Responsible Investment (SRI) funds in the UK - the Triodos Sustainable Pioneer fund and the Triodos Sustainable Equity fund. The Triodos Sustainable Pioneer fund is a global equities fund investing in small and medium-sized listed companies that are focused on the sustainable themes of climate protection, healthy living and clean planet, or are pioneers in corporate social responsibility. Examples include wind turbine manufacturer Vestas, medical equipment manufacturer Smith & Nephew, and electric car manufacturer Tesla Motors.
The year-to-date performance of the funds show strong results, with both the Triodos Sustainable Equity fund and the Triodos Sustainable Pioneer fund outperforming the benchmark of their investment classes with respectively 12.0% compared to 8.7% benchmark (1) and 14.2% compared to 12.5% of the benchmark (2).
The Socially Responsible Investment (SRI) retail market is now worth over £16 billion in the UK, up from £6 billion in 2010 (3). Although the market is buoyant, and ethical funds have been shown to outperform mainstream investments (4), 67% of investors surveyed have not been offered sustainable and ethical investment opportunities, and 54% would not know where to go to find out about them.
John Fleetwood, Director of 3D Investing, independent investment advisors*, commented: "While it's encouraging to see further evidence of the growing demand for sustainable and responsible investment opportunities, the fact that two thirds of investors have never been offered them suggests a worrying disconnect.
"The market is growing at pace but it seems intermediaries are not keeping up. Funds that uphold environmental, social and governance standards are now outperforming those that don't by a significant margin, yet for some reason the majority of IFAs are not actively promoting ethical funds. The positive investment market could grow significantly if financial advisers were more familiar with the range of sustainable investment funds on offer, such as the Triodos Equity Fund."
While many investors recognise the risk associated with investing in companies that damage society and the environment, with 42% saying they will not be successful in the long term, over half (56%) don't know which companies or industries are included in their investment funds or pension.
Karn Shah, aged 28, from Bristol, is a Triodos Bank SRI customer. He says: "Until recently, I never thought to ask what my savings are being used for. When I learned that most banks invest in fossil fuels and other things I don't want my money to support, my wife and I decided to look for alternatives. We wanted our savings to be invested ethically and to support innovative businesses. I did some research and found Triodos offered a unique type of ethical banking, one that screens positively to rule out the risk of investing in arms or fossil fuels. So we chose to move our savings into two Stocks and Shares ISAs offered by Triodos."
It seems Karn is not alone. Eight out of ten respondents (81%) say banks and other financial institutions should be more transparent about where people's money goes, and 68% would like to have more knowledge and transparency about where their money is invested.
Bevis Watts adds:"Investors have a right to know how their money is being used. We want people to really think about what their bank or financial provider is doing with their money. At Triodos Bank we offer complete transparency and believe other financial institutions should - and will - follow suit. We encourage all investors to think about and ask where their money goes and make a conscious decision to invest in companies that are good for people and planet - as well as providing a financial return."
Important information: With SRI funds, capital is at risk and the value of an investment can fall as well as rise, income is variable and not guaranteed, and individuals may get back less than invested.
Investing in the funds on offer from the UK branch of Triodos Bank NV is available only to UK residents aged 18 years of age or over. This press release aims to provide individuals with information to help them make an informed investment decision and is not personal financial advice. If individuals are unsure of how suitable an investment is for them, they are recommended to seek independent financial advice. Regulations, including tax rules are subject to change and the value of any benefits depend on an individual's financial circumstance.
Both the Triodos Sustainable Equity Fund and the Triodos Sustainable Pioneer Fund are denominated in GBP however the Investment Manager invests based on Euro amounts, and any dividends paid are converted back from Euros to sterling. As such an individual's total return is subject to the euro-sterling exchange rate at the point of transaction. Individuals are also exposed to exchange rate fluctuations in the regions in which the funds invest.
* Triodos Investment Management is a marked sponsor of The Good Investment Review published by 3D Investing and Good with Money. The guide provides general information only. It is not financial advice.
PR and Comms Manager, Triodos Bank
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About the research
A nationally representative sample of 2,020 UK adults (aged 18+) were surveyed by Opinium Research on behalf of Triodos Bank between 15-19 September 2017. 1,217 (60%) of respondents have an investment product, most commonly a pension (46%), a stocks and shares ISA (17%) or stocks and shares (15%). Likelihood to hold an investment product increases in line with age from 53% of those aged 18-34 to 66% of those aged 55+. Triodos Bank UK has conducted an Impact Investing survey each year since 2012.
About Triodos SRI Funds
As an experienced global impact investor, Triodos Investment Management (TIM) is active in a range of impact investment strategies, such as Energy & Climate, Inclusive Finance, Sustainable Food & Agriculture, Arts & Culture and Sustainable Real Estate. In addition to these strategies in non-listed private equity and private debt, Triodos Investment Management also invests in listed companies with an above-average environmental, social and governance (ESG) performance through Triodos Socially Responsible Investment (SRI) funds. Total assets under management, as per end of June 2017, amounted to EUR 3.3 billion, of which EUR 1.335 billion was from the Triodos SRI funds.
Awards and ratings
The Triodos Sustainable Pioneer Fund has previously been named best performing fund over three years in the Thomson Reuters Lipper Awards (Equity Global Small and Mid Caps category).
Climetrics, the world's first climate impact rating for funds, awarded their top rating of five green leaves to the Triodos Sustainable Equity Fund - putting it in the top 8% ranked funds for sale in Europe for low-carbon investment - and four green leaves to the Triodos Sustainable Pioneer Fund.
Both funds have achieved a rating of 4 stars in the Good Investment Review 2017 by 3D investing.
(1) Morgan Stanley Capital International (MSCI) World Net Total Return in USD (converted to GBP). The fund may deviate from the benchmark because the fund only invests in companies that meet the strict sustainability criteria.
(2) 30% WilderHill New Energy Global Innovation Net Total Return, 30% FTSE Environmental Opportunities All-Share Total Return, 30% MSCI Daily Net Total Return World Health Care Equipment & Services, 10% MSCI Daily Net Total Return Small Cap World (all converted to GBP).
(3) Green, Social and Ethical Funds in Europe 2016, Vigeo Eiris Report Oct 2016, p.4 and p.9. The total European SRI market accounts for 158bn/Euro AuM. The UK holds 12% of this market which equates to €18.96 billion / £16.8 billion as of October 2016.
(4) The ethical investment boom, The Financial Times, James Kynge, 3 September 2017.
About Triodos Bank
Triodos Bank is a global pioneer in sustainable banking using the power of finance to invest in projects that are good for people and the planet. Triodos uses its €13.5 billion (2016) in assets to create social, environmental and cultural value in a transparent and sustainable way.
With UK operations based in Bristol, Triodos Bank has branches in the Netherlands, Belgium, Spain, Germany and an agency in France. Globally, Triodos Bank has microfinance projects in Central Asia and Eastern Europe, and is a founding member of the Global Alliance for Banking on Values (GABV), a worldwide network of 43 banks seeking to transform finance into a vehicle of positive influence.
Triodos Bank NV (incorporated under the laws of the Netherlands with limited liability, registered in England and Wales BR3012). Authorised by the Dutch Central Bank and subject to limited regulation by the Financial Conduct Authority and Prudential Regulation Authority. Details about the extent of our regulation by the Financial Conduct Authority and Prudential Regulation Authority are available from us on request.