UK investors are failing to prioritise sustainable and environmental, social and governance (ESG) investments, despite the recent COP26 summit and the government’s climate policy, according to a survey by forex broker HYCM.
The poll of 857 UK investors with investments worth more than £10,000 found that that 45% see sustainable investing as important. This rises to 60% among investors aged 18-34, compared to 30% of those aged 55 and over.
When asked about their investment strategies for the coming year, 52% of younger investors stated they plan to invest in more sustainable assets under management, in contrast to 12% of over-55s.
Just 28% said that COP26 and the government’s stance on climate change have accelerated their plans for ESG investments, while only 19% consider them to be a savvy financial strategy.
A third plan to invest or increase their stakes in green energy such as wind power, water stocks and solar during the next 12 months.
HYCM chief currency analyst, Giles Coghlan, said the survey shows investors “are in no rush to hop on the ESG bandwagon”, potentially due to concerns surrounding greenwashing or the performance of sustainable investments.
“Investors remain broadly sceptical about ESG and, at least in the short-term, all bets are off that we will see any immediate investor activity off the back of the summit,” he added.
“But that said, it is important not to make any sweeping statements about the ESG landscape: younger investors and those with larger portfolios are comparatively optimistic about prospects for green investment and are considering this as a keen focus in their strategies.
“Expect this sunnier outlook to feed into the corporate mentality, as titans like Microsoft and Nike will likely be keen to establish their ESG credentials.
"In the pivot towards a greener future, renewable energy looks set to increase demand for copper, which usually enjoys a strong springtime, so this is something investors should monitor closely.”
Image credit: iStock
Author: Huw Morris