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The merits of sustainable investing – fund selectors disagree with clients

Green brain tree

The asset manager found most retail investors it surveyed see sustainable investment funds as “more profitable because they are proactive in preparing for environmental and social change”. At the same time, only a small minority appreciated sustainable investing involves “excluding controversial companies” (see chart).

This contrasts with the findings of an ESG survey conducted by Expert Investor earlier this year among professional fund selectors. The poll found only a very small minority considered sustainable investments primarily “a benefit to alpha”.

 

The Schroders survey also found that achieving a profit is just as important a consideration for retail investors as the potential positive impact [on society and/or the environment] of investing in a sustainable investment fund.

While the potential of achieving higher returns seems an important consideration for their clients to invest in sustainable funds, most professional fund buyers even are willing to accept a lower return from following a sustainable investment strategy. That’s especially the case for fund selectors in the Nordic countries, which are generally most open to investing in sustainable funds.

Part of the Bonhill Group.