In Focus: Sustainable investing  

ESG investing catching on with HNWIs

ESG investing catching on with HNWIs

Investment in ESG funds by high net worth individuals over the age of 65 doubled in the six months from October 2021 to March 2022. 

Some 42 per cent of investors in this category said they invest in ESG funds or stocks, up from 24 per cent six months previously, according to the latest Saltus wealth index.

The figures are based on a survey of 1,000 people in the UK with investable assets of more than £250,000.

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The results showed that the perceived impact of ESG has grown, as 74 per cent of respondents think responsible investments make a tangible difference. This was up from 48 per cent six months previously. 

Overall, 73 per cent of respondents said they invest in ESG, up from 64 per cent over the same period.

Saltus partner, Michael Stimpton said this was encouraging to see.

“In the current energy crisis, green alternatives are high on the agenda, and from an investment point of view more investors choosing ESGs as part of a diversified portfolio can be very impactful,” he said.

Almost one in five respondents (18 per cent) think ESG makes a “big impact”, up from 15 per cent previously. 


But of the 27 per cent of respondents who do not invest in any ESG stocks or fund, 31 per cent said this was because they felt they would have ‘insufficient returns’.

Holden & Partners managing partner, Steven Pyne specialises in environmental and ethical investments, in his view investors need to be in it for “the right reasons”.

“Obviously, the returns are important, but you have to accept that you are not going to be investing in oil and areas like tobacco, for example. So you are going to be exposed to more risk," Pyne said.

“But if you're convinced that this is the right thing to do for the longer term, then you should be convinced that eventually these areas will come good."

He added: “If you look at performance over the last five or 10 years, a lot of sustainable portfolios actually have matched the performance of conventional investments.

“That's not always the case, you have to be prepared that they can be more volatile but it's like any investing, you need a balanced portfolio.

“In the longer term, we have conviction that this area will produce a decent return. So I think it comes down to education, as much as anything."

In Pyne’s opinion, the industry has come a long way in the past 20 years in terms of the ESG products and funds that are available, but he believes the government needs to do more to further propel change. 

“That would mean greater tax incentives, perhaps for green investments and help with more localised investment projects,” Pyne said.

“From the industry specifically, I think we'd like to see more products that are specifically targeted at areas like renewable energy, if we're talking about climate change. Efficiency technologies, as well.