In an IG Investor Sentiment Survey of c.4500 clients, only 28% of UK clients said ESG (Environmental, Social, Governance) considerations “are important to them when making an investment decision.”
This is particularly low “in comparison to 42% of Australian investors and 40% of Japanese investors.”
According to IG’s latest Investor Sentiment Survey, female clients (23%) are more likely to consider “the importance of ESG when making investment decisions, compared to men (9%).”
Nowadays, investing is “no longer strictly about returns.”
Today, many investors are also “concerned about the ethical values and wider societal impact of their investments.”
Commonly known as ethical investing, this investment approach “places an investor’s ethical (moral, religious, and social) values as a primary objective of the overall strategy, sometimes even ahead of profit motives.”
Essentially, ethical investors “want their money to do good, or at least do as little harm as possible. 1 in 3 of UK clients believe that ESG is important and claim that companies and people have a moral and ethical responsibility to protect the environment and future of the planet.”
Key Findings:
As noted in the update shared with CI, sustainable investments “grew by 15% from 2020 to 2022; searches for ‘sustainable investing’ were also up to 83%, which shows an increase in demand.”
According, to IG’s Ethical Performance Index (EPI), American multinational company ManpowerGroup “ranks first, with an EPI-score of 2.6 out of 3, followed by the Irish American company Accenture, with an EPI-score of 2.5”
US tech giant Apple “topped the table of LGBTQ+ friendly investing.”
The company, which ranked fourth on Fortune 500’s annual list in 2022, “has an internal resource group and platform for its employees named pride@Apple”
The rise of sustainable investments
Sustainability is becoming “an increasingly essential element and theme of investing.”
According to updates shared with CI, sustainable investments “grew by 15% from 2020 to 2022, accounting for 36% of professionally managed assets across the US, Canada, Japan, Australasia, and Europe.” Google keyword data showed “that in the past year, searches for ‘sustainable investing’ were up 83%, indicating a growing interest in the strategy.”
There are many different factors driving this growth.
They include:
- Growing investor demand in values-based investing
- A rise in ethics- and sustainability-based investment strategies
- Socio-political changes which were mainly accelerated by the COVID-19 pandemic
Companies with the highest ‘Corporate Social Responsibility’ Score
In first place is recruitment agency, ManpowerGroup, “with an EPI score of 2.61 out of a maximum of 3, followed by Irish American company Accenture, which accumulated an EPI score of 2.55.”
Also making the top ten are “building technologies company Johnson Controls (2.42 EPI score), UK-founded real estate giant JLL (2.38), French energy specialist Schneider Electric (2.21), and US computer and software maker Microsoft (2.2).”
Other UK-based and -listed companies that “featured on the wider list include Linde PLC at number 26 (with an EPI score of 1.9) and Northumbrian Water Group at number 87 (with an EPI score of 0.84).”
The complete study can be accessed here.
