The fund industry is talking in an “echo chamber” when it comes to discussing environmental, social and governance-based investment approaches, with consumers showing very low awareness, a poll shows.
Just 2% of the UK public said they were aware of ESG investment approaches, according to a YouGov survey of 2,055 Brits, and 1,112 readers polled in The Times newspaper.
The astonishing findings come despite numerous polls among fund selectors, pension funds and investment consultants all showing far higher levels of awareness.
The results for “ethical investing” were more encouraging, however, with more than a third of the public (36%) aware of the approach. Most of those with an awareness of ethical approaches, assumed that these related to negative screening, rather than engagement-led or positive screening approaches.
“The idea of avoiding certain sectors makes many people uncomfortable, as it is nuanced and rarely as simple as one thing being ‘good’ and another being ‘bad’,” explained Holly Mackay, CEO of Boring Money. “We do not like the idea of having someone else’s moral code shoved down our throats”.
The research showed that arms / weapons, tobacco and gambling were the most common areas that consumers sought to avoid, when exploring ethical investing, with nearly two thirds of respondents (60%) preferring to avoid these sectors.
Women were found to be more likely than men to want their cash to be invested with an ethical or impact strategy, with 61% of those polled saying they would like their portfolio to have a positive impact.
“It is striking that women consistently report finding the concept of impact investing more appealing than men,” Mackay said in a statement.
“Across the board, those who don’t find the concept appealing generally report a concern about supposed poor returns – there are still assumptions that putting your money to good use inevitably involves poorer returns.
“If the industry can tackle these concerns, and take more time to evidence the impact that investors’ money is actually having, we note a significant interest in impact investing which could introduce a new type of customer to the investment markets.”