‘Expert’ investors value ESG more than novices

Seasoned investors are more likely than novices to attribute performance benefits to ESG factors — but they also value sustainable investing most for environmental and social benefits.

That is according to a report published Tuesday by Schroders, which earlier this year surveyed more than 23,000 people globally.

Just over two thirds of respondents who identified as expert of advanced investors said they agreed with the statement that “Sustainable investing is the only way to ensure profitability in the long term,” compared with 52% of intermediate-level investors and 43% of beginners. Further, experienced investors were also much more likely (69%) than others to agree that “investment can drive progress in sustainability challenges such as climate change.” Fifty-seven percent of intermediate investors and 49% of beginners said they agreed with that statement, according to Schroders.

Over the past several years, people have become more likely to say they choose sustainable investments because of environmental and social factors, rather than potential for higher returns, the company found. Fifty-two percent of people drawn to such funds cited environmental impact as their leading concern, up from 47% who said so in 2020. Meanwhile, 43% pointed to “societal principles,” compared with 32% two years ago. Those saying higher returns were their primary reason declined from 42% to 36%.

When it came to factors that would lead people to invest more in sustainable funds, the top reason (57%) was being able to pick funds that go along with their personal preferences on ESG issues, according to Schroders. Behind that were “more education about sustainable investment in general” (48%) and data showing higher returns associated with those funds (44%).

“The interaction between sustainability and returns has seen some polarizing results this year,” the firm’s head of sustainability strategy, Hannah Simon, said in an announcement. “While self-professed beginner investors appear more skeptical, the majority of people believe sustainability is crucial to delivering long-term returns.”

Earlier this year, Schroders issued separate survey data from retirement-plan investors, finding that 74% said they would increase contribution levels to their accounts if sustainable funds were available.

This story was originally published on ESG Clarity.