Posted inESG

1 in 10 responsible investors would sacrifice returns

One in 10 investors say they would sacrifice as much as 5% in returns a year to invest responsibly, research reveals.

The latest Responsible Investing Survey from NN Investment Partners showed 10% of investors are willing to forgo between 4.1% to 5% annually if it meant having a positive sustainable impact.

However, on average, investors said they would sacrifice 2.4% a year to have a positive ESG impact, according to the research.

The survey, which included responses from 290 investors based in France, Germany, the Netherlands, Italy, Belgium, UK and Scandinavia, showed over half (52%) of the respondents still believe responsible investing reduces investment returns.

German investors were revealed to be the most pessimistic about responsible investing, with 80% thinking this type of investing reduces returns.

Italian investors were the second most pessimistic at 75%, followed by Dutch investors at 71% – while French (26%) and Belgian (27%) investors proved to be less negative.

However, NN Investment said extensive research proves responsible investing does not necessarily cost returns and can improve risk-adjusted performance.

“While it is great to see that investors are prepared to give up a proportion of their returns to contribute to a more sustainable world, research actually shows that ESG Integration does not automatically lead to lower returns,” Jeroen Bos, head of specialised equities and responsible investing at NN Investment Partners said.

“For example, a metastudy incorporating the conclusions from around 2,200 academic studies conducted between the early 1970s and 2014 revealed a positive relationship between corporate ESG scores and financial performance in the majority (63%) of cases. Claims that you must surrender returns to engage in responsible investing are therefore flawed,” Bos added.

 

 

Joe McGrath

Joe McGrath is the editor of ESG Clarity. He has written for a variety of B2B and national newspapers including the Financial Times, the Wall Street Journal, Financial News and FTAdviser.com. He qualified...

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