A 2019 survey by the Department for International Development on UK public demand for sustainable investment opportunities found that 68 per cent of UK savers want their investments to consider the impact on people and the planet, alongside financial performance.
It shows that interest is even higher for millennials, women and people with more than £25,000 in investible assets.
While this type of investing is important to people, the survey suggests that many people are not investing this way because the industry still needs to:
- improve the availability and accessibility of products;
- raise standards and develop common terminology on sustainability and impact;
- address misconceptions on risk and return, where many people mistakenly think that sustainable investing inherently means that financial returns will be lower; and
- share clear and simple information about sustainable investing.
For advisers, talking to their clients about ESG investing is still a challenge – a discovery Mr Stewart made when he spoke to IFAs at roadshows the company held last year.
“Advisers are close to their clients,” Mr Stewart says. “They are used to having conversations about financial matters and they sort of feel this is a separate issue. I just think it is an uncertainty about stepping into a world which is not theirs to talk about.
“I almost think they feel they are tiptoeing on people’s beliefs.”
He adds: “We are trying to take this on board, as to how can we do a better job of explaining things to advisers, to give them the confidence.
“We are seeing clients who are interested, and end investors who are interested, but there is this break, which is the lack of understanding.
“So, as an industry we have to do a better job of explaining things and that is part of what we are up to.”
In the next 17 years Mr Stewart says he does not want to be attending conferences where ESG is seen as an add-on to the investment process.
With the pace of change taking place at the moment, that could be happening very soon.
Ima Jackson-Obot is deputy features editor of Financial Adviser and FTAdviser