Investors want more transparent sustainable funding opportunities
New research from ethical investment specialists Triodos Bank has revealed that investors want to increase ethical investment prospects and enhance socially responsible investment (SRI) opportunities, despite many feeling that they don't have the opportunity to do so.
A survey of 2,003 investors revealed that 62% want to invest in companies that are both profitable and make positive environmental and social impacts. Despite this, more than half (51%) say they have never been offered the opportunity to invest in socially responsible investment (SRI) funds.
Triodos Bank’s head of retail banking Huw Davies said: “Many investors now believe that good long-term returns can go hand-in-hand with sustainable and ethical investments. Our research reveals that most investors now want sustainable and ethical investment options, and the industry must respond to this demand.
“Recent growth in the SRI market is positive and we want to see that growth accelerate to have greater impact in addressing social and environmental issues.”
The UK SRI market is estimated to be worth more than £15bn, with the figure rising by more than £2.5bn over the last few years. The demand for responsible investment is apparent, despite more than half of the investors surveyed claiming they did not have the opportunity to knowingly invest in the market.
According to the banking group, there exists a disconnect between companies becoming more sustainable and investors investing in these companies. Because of this, Triodos Bank is calling on the banking sector to report more effectively as to where they invest people’s money.
“We see a growing awareness amongst investors that their money has an impact on the world in which we live through how it is used by banks and funds,” Davies added.
“We want to call on all banks and financial providers to be more transparent and open about where they invest people’s money, so that investors can make informed choices. As a values based sustainable bank, Triodos Bank enables money to be used for positive social and environmental change.”
With 53% of those surveyed believing customers should be made fully aware where their money is being invested, there is a growing demand for greater transparency amongst investors, who admit they currently have no idea where their money goes. The research revealed that investors want their money to go towards socially beneficial causes such as healthcare, energy efficiency and renewable energy.
Currently, investors are “in the dark” about where their money is invested. Nearly half (47%) of those surveyed admitted they are unaware of what companies or industries are supported by their investments – according to the survey data.
A report from EY concluded that renewable energy sources continue to remain “safe bets” for investors as clean energy transactions thrived in the second quarter of 2016 amid ongoing global market volatility.
Earlier this year, the world’s largest investment firm, Blackrock, called for companies to build environmental, social and governance (ESG) management into their business models, calling it a sign of ‘operational excellence’.