In my last blog I looked at the reasons why many people were becoming concerned about their Social and Ethical responsibilities. Let’s move on…
For many years, the perception has been that there is a price to pay for taking social, environmental or ethical factors into account and that has dissuaded many from investing in this way. It has also limited the number of advisers and discretionary fund managers (DFMs) promoting the area.
But this change in perception, added to a growing awareness that there is a need for a more socially and environmentally sustainable economic system (plastics being a case in point) has helped drive growth.
There is of course views that are a little more sceptical. For example, Investment Association figures show ethical funds stand at £16.7bn in funds under management at the end of July, which represents a tiny 1.3 per cent share of the overall investment universe”.
While ethical consumerism has been on the rise, the trend has not been mirrored in the investment world, despite the best endeavours of advocates to raise awareness of ethically and environmentally screened funds.
Does that mean investors don’t care about issues like the damage being done to our oceans by plastic waste or climate change?, it is asked.
It would appear not as the outer investment markets are prepared to use shareholder influence to engage with companies on these matters.
There is also an assumption that these types of Ethical funds appeal more to millennials than other demographic groups. Millennials, those born between the early 1980s and early 1990s, are often said to be the driving force behind the increasing number of ethical and sustainable mandates launched by fund groups.
But others believe this generation cannot take all the credit.
I, personally, have noticed that there has been a significant shift across a much wider group of investors, both by age and type; from charities, private clients, pension funds and financial advisers and while there are suggestions that millennials are more interested in SRI investing, we are seeing interest in the area from a range of demographic groups.
We, specifically, are talking to all our clients about their choices in this area when making investment decisions, and this, we believe, is driving demand.
If you would like to have a talk with us about Ethical and Socially Responsible Investing, give us a call or drop us an email and we can have a chat over a coffee. (My treat!).