Plastic waste reduction, climate change, community development—investors care strongly about environmental and social issues, and that’s reflected in their ever-growing interest in sustainable investing. But the number adopting sustainable investing, while growing, still lags, according to the Institute for Sustainable Investing’s 2019 “Sustainable Signals” report, which surveyed 1,000 active individual U.S. investors. While a majority agrees it is possible to balance financial gains with a focus on sustainability, some still believe sustainable investing comes with a financial trade-off, while others want more choices, more guidance and more reporting on the impact sustainable investing offers.
Scroll down for highlights from “Sustainable Signals: Individual Investor Interest Driven by Impact, Conviction and Choice.”
Enthusiasm for Sustainable Investing Is at an All-Time High
More than 8 in 10 U.S. individual investors (and 9 in 10 Millennial investors) now express interest in sustainable investing. However, while adoption is growing — with half of individual investors (and two-thirds of Millennials) taking part in at least one sustainable investing activity — it still lags behind interest.
SUSTAINABLE INVESTING - INTEREST AND ADOPTION BY U.S. INDIVIDUAL INVESTORS
Investors Want Products That Match Their Interests
The most popular issues identified by sustainable investors are plastic reduction and climate change, with 46% of those polled indicating they are “very interested” in both.
MOST POPULAR ISSUES WITH SUSTAINABLE INVESTOR
Investors also seek to measure impact against sustainability themes they care about most.
of investors say they are interested in receiving a report detailing the impact of their sustainable investments.
Investor Conviction Outweighs Financial Trade-Off Concerns
Respondents were conflicted about the financial returns of sustainable investments, but ultimately their belief in the potential for strong financial performance outweighed their skepticism. When asked if investing sustainably requires a financial trade-off, 64% of investors said yes. However, when asked if companies that engage in leading social, environmental and governance practices have the potential to be more profitable and may be better long-term investments, an overwhelming majority also said yes.
INVESTOR VIEWS ON SUSTAINABLE INVESTING
Investors Want More Product Choices
As sustainable investing matures, investors are looking to diversify their investments. Our survey makes clear that the range of products and solutions currently available has not kept pace with investor demand. For example, 88% of survey respondents with access to 401(k) plans would be interested in sustainable 401(k) options, but less than half say they are available.