The majority of investors believe they should consider climate change in their investment decisions but many fail to act on it, new research from Embark Group has shown.
The Embark Investor Confidence Barometer found that 61% of advised investors and 62% of non-advised investors agree it is their responsibility to invest in a way that doesn’t contribute to climate change. Embark said this was particularly the case for younger investors aged between 35-44 (73%).
The majority also feel confident about potential returns, with 54% stating that they do not believe taking a responsible stance towards investing will hinder returns, with only 16% believing it will.
Despite this, Embark said investors continue to appear ambivalent towards responsible investing.
Around half of both advised and unadvised investors (50% and 51%) did not consider the issue as important when making decisions about their portfolio. This was slightly higher among advised men (54%) compared to women (46%).
Only a quarter (24%) of advised investors disagreed and this was even lower for non-advised investors (18%).
The findings also showed the younger the investor, the more indifferent they appear to be, with 61% of those aged 35-44 agreed that responsible investing was not important to them in making decisions about their portfolios, compared to 42% of 65-70 years olds.
Sara Wilson, head of platform proposition at Embark, said: “Pretty much everything we read tells us millennials are prioritising responsible investing. In some ways, the findings of our latest Barometer reinforce this view: almost two-thirds of investors agree it is their responsibility to invest in a way that does not contribute to climate change. However, this does not appear to be influencing on-the-ground investment decisions.
“So, while investors are talking a good game, our Barometer suggests that many of those with investable wealth – i.e. those in a good position to do something about it – don’t yet consider it important enough to influence their investment choices. With the UN Climate Change Conference kicking off in Glasgow shortly, this is a concerning insight.”
The research also found that investors are unsure about the accuracy of ESG information.
Nearly a quarter (23%) of advised investors said they felt unsure if the information provided on ESG in relation to their portfolios is accurate, with this number rising to 43% among non-advised investors.
