"Sustainability" is a popular term in wealth management today, but many affluent and HNW investors apparently worry that information they receive isn't reliable or clear enough.
A study of 2,040 investors across Asia, the Middle East and Europe showed that emerging affluent and high net worth individuals know about and are keen on sustainable investing, but fret that it is hard to measure objectively and clearly.
The report, produced by behavioural finance experts Oxford Risk, and backed by Standard Chartered, highlights how worries about transparency and measurement are holding the sustainability movement back.
The Sustainable Investing Review 2021, Standard Chartered’s fourth study since 2018, was conducted among investors in mainland China, Hong Kong, Taiwan, Singapore, India, the United Arab Emirates and UK. Some 13 per cent of investors already have more than 25 per cent of total investments channelled into sustainable solutions, compared with just 2 per cent of investors in 2020.
Recent controversies about alleged “greenwashing” of investments suggest that while the move towards more supposedly environmentally-friendly ways of managing money is a hot trend, concerns about reliable data and clear information need to be addressed. The move towards “net-zero” carbon emissions by mid-century, while endorsed (at least in public) by many governments, remains controversial, particularly as energy costs rise, as they have in the UK, for example.
“With investor interest at an all-time high, we can expect more investment capital to move into sustainable investing solutions, presenting a huge opportunity to address pressing global challenges. To ensure we cross the tipping point, it is vital for the industry to collaborate and develop robust governance frameworks and address the concerns with transparency and measurement,” Marc Van de Walle, global head of wealth management, Standard Chartered, said.
Some 82 per cent of investors know what sustainable investing is; 81 per cent show interest in sustainable investing; 40 per cent of those who have not yet invested in sustainable solutions plan to in the future, and 61 per cent have placed funds in a sustainable investment solution.
However, 69 per cent of those surveyed need more numerical evidence of the impact being achieved from sustainable investments; 51 per cent said sustainable investing is simply too new, and 43 per cent think donations can achieve a more immediate social outcome, the survey found.
The study was conducted between 20 May and 6 June. The survey, which used behavioural and attitudinal techniques, was the same for each respondent, save for the order of statements, which were random to ensure academically reliable results.