Advisers who thought that sustainable (or ESG) investing was a passing fad need to think again. It’s a secular trend that won’t be reversed, and firms that ignore it will lose clients to those that choose to embrace it.
2019 has arguably seen a tipping point in public attitudes to climate change in particular. That’s partly down to the efforts of the teenage environmental campaigner Great Thunberg. There’s also been widespread coverage too of climate strikes by schoolchildren around the world and the Extinction Rebellion protests in London.
A recent survey, commissioned by Christian Aid, found that 71% of the UK public think that, in the long term, climate change will be more important than exiting the EU. Six out of 10 adults said ministers are not doing enough to tackle it. Another survey, for the Evening Standard, showed that 85% of adults are now concerned about global warming.
Schroders publishes an annual survey of UK financial advisers, and the 2019 survey has just been released. Astonishingly, this is the first year that advisers were specifically asked about ESG. These were the findings:
Advisers believe disruption will be the prevailing theme for the next decade, with 76% believing that disruption from changes in the environment, including climate change will increase
47% of advisers said that climate change was raised by clients either “fairly frequently” or “most of the time” in conversation. 41% reported the same about the environmental impact of investments
43% of advisers explicitly consider ESG factors as part of their fund selection process
Commenting on the survey’s findings, Philip Middleton, Head of UK Intermediary at Schroders, commented: “As concern has built in 2019 about the ongoing climate emergency, our survey suggests that awareness of ESG factors among investors is rising and is fuelling conversations with advisers.
“We are pleased to see that 43% of advisers consider ESG factors in their fund selection process as ESG continues to grow in importance.”
If you’re an adviser and would like to learn more about this subject, why not sign up for The Values Based Adviser, an adviser education event I’m compering in Birmingham on Thursday 23rd April 2020? It’s being organised by Global Systematic Investors, a boutique fund management company that enables people to invest sustainably in a cost-effective, evidence-based way.
Speakers at the event will include:
Max Tennant, Managing Partner at GSI and the founder of IFAMAX Wealth Management in Bristol;
Eoghan Gill from the ESG research and ratings firm Sustainalytics;
Dr Jake Reynolds from the Cambridge Institute for Sustainability Leadership; and
Tim Horrocks from the Cheltenham-based financial planning firm RockWealth, which has put sustainable investing at the core of its value proposition.
GSI fund managers Bernd Hanke and Garrett Quigley will also be explaining how, by combining factor-based investing with an ESG overlay, they are able to generate returns which are at least as good as those delivered by comparable mainstream funds.
Admission to The Values-Based Adviser is strictly confined to financial advisers only and each place costs £25. Space is limited, so we urge you to book early to avoid disappointment.
Registration is simple. Just follow the link below:
Picture: Karsten Würth via Unsplash