ESG investing still not clear

Article by Phil

We’ve looked at ESG (Environmental, Sustainable and Governance) based investments and investing practices before. It’s certainly seems to be in the news a lot, but is it clear to investors that they are getting what they think they should be getting? It seems maybe not, according to the latest research by Boring Money (8th April). In their latest survey which asked over 1,500 investors for their views, in particular it questioned what people expected in order to believe that an investment was really matching the ESG credentials. it found that:

  • Half of investment clients thought that investment funds should list details of all their holdings to create clear visibility, instead of just listing the top 10 for example.
  • 42% said that an investment fund should make a statement about their specific ESG objective.
  • The same number also said that funds should have to “prove” how their fund had actually delivered its ESG objectives, with evidence of what they had directly delivered.
  • Having a kitemark or a label explaining ESG performance (measured) and understandable would be a good idea.
  • A third of investors thought that levels of carbon emissions were the number one indicator of sustainability and the most important measure.

It seems that investors are still not convinced that ESG credentials are being met. The government seems to agree and recently announced funding for an independent review into the matter. They are increasingly concerned about so called “greenwashing” where business undertakes high profile but superficial ESG projects, whilst in the background continuing with business-as-usual practices.

For more information talk to your Money Advisor about your ESG options and how to make sure you’re investing in the right funds to match your outlook.

 

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