Liontrust research shows investors placing greater importance on sustainability

New research by Liontrust finds three quarters of participants acknowledge the importance of sustainability in their everyday life and over half have already engaged in sustainable investing

Recent research by Liontrust has revealed that 75% of respondents recognise the importance of sustainability in their everyday life. Of these, 51% have chosen to invest sustainably, an increase from 41% in December 2020. Additionally, 43% intend to commit more money to sustainable strategies over the coming 12 months, suggesting that this trend continues to gain momentum.

When broken down into age groups, there is a clear preference for sustainable funds among younger investors, with 79% of respondents under the age of 35 actively looking to invest in this way.  However, this bias is not limited to younger generations: 52% of investors aged between 35 and 49 stated an interest in sustainable products, with the same percentage of the 50 to 65 age group expressing a similar appetite.

When asked about their principal motivation for investing sustainably, 54% cited a desire to avoid companies or industries that are harmful to the environment or society.  However, there was a similar level wanting to have a positive impact, who are concerned about the risks associated with climate change or who wish to align their investments with their personal principles, with 52% of respondents highlighting each of these factors as being influential

The same study found that 80% of wealth managers and 64% of advisers have seen an increase in clients investing sustainably over the past 12 months. 28% of wealth managers and advisers have more than 20% of their clients investing in this sector compared to 22% in December 2020, 13% in July 2020 and 6% in November 2019. When asked about expectations for the coming 12 months it was predicted that current levels would increase, with 86% of wealth managers and 68% of advisers forecasting more clients seeking to invest sustainably in the next year.

Concerns about greenwashing remain 

The research found that worries about identifying greenwashing are increasing: 76% of wealth managers and 57% of advisers said they had concerns. Additionally, 19% of wealth managers and 47% of advisers are not confident or only slightly confident of identifying greenwashing.

Simon Hildrey, Chief Marketing Officer, Liontrust said: “The research shows that it is not just young people who are interested in sustainable investment and who care about how they make their money as well as how much money they make. More than half of 35 to 65-year-old investors are looking to invest sustainably. This reflects the continued growth in demand for sustainable investment funds, which we have seen at Liontrust as we now have just under £12 billion in assets under management and advice in our Sustainable Future funds (as at 30 June 2021).

“With the proliferation of sustainable investment funds so the concern about greenwashing has also increased. Asset managers have a responsibility for transparency and clear and regular reporting. This includes disclosing full holdings, explaining why stocks are held by funds and the impact of these companies. Impact should cover the exposure of funds to sustainable themes, carbon intensity against the market they are in and how themes relate to the United Nations Sustainable Development Goals.”

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