From upstream to mainstream:

ESG at a tipping point

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From upstream to mainstream: ESG at a tipping point

By IN Research and Calvert — November 15, 2018

ESG Investing Has Reached Critical Mass

Over the past two decades, ESG interest steadily gained traction among investors. In 2018, that interest has reached a tipping point. Socially responsible investment values went mainstream this year, gaining broader acceptance among generations and wealth groups.

In a year's time, the percentage of Millennials expressing a high level of interest in ESG investing jumped from 26% to 35%, advisers say, while the percentage of Gen Xers embracing ESG spiked from 16% to 25%.

The numbers speak to the groundswell of interest. In a year's time, the percentage of Millennials expressing a high level of interest in ESG investing jumped from 26% to 35%, advisers say, while the percentage of Gen Xers embracing ESG spiked from 16% to 25%.

This is more than a generational story, however. Interest has also grown up the wealth spectrum. Twenty-six percent of ultra-high-net-worth investors now show a high level of interest in ESG investing, advisers say, up from only 10% in 2017. Similarly, interest among very-high net worth investors shot from 13% to 19% in a year's time.

Advisers are taking note. As more clients demand that ESG factors get utilized in their portfolios, the adviser community has reached its own responsible investing turning point. A growing number of advisers are ramping up their understanding of ESG investing and using that knowledge to attract new clients.

This paper explores the critical issues concerning both investors and advisers as ESG investing reaches critical mass. Among other issues, it identifies the key drivers of ESG investing among investors and the barriers they see to incorporating socially responsible investing principles in their portfolios. The paper also shares adviser expectations for ESG investing, the areas clients lean on advisers for help, and, importantly, how advisers may use ESG expertise to sustain and grow their practice in the years ahead.

To learn about these and other issues, InvestmentNews Research surveyed more than 300 financial advisory professionals and compared their answers to our ESG adviser survey last year. This year, InvestmentNews Research also surveyed more than 800 investors to gauge their own attitudes toward ESG investing. The following report details our findings, and their implications for advisers.

CLICK HERE TO DOWNLOAD THE REPORT

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