Advisers predict dramatic surge in sustainable investing

UK advisers predict growth in ESG investing despite current low levels, according to research

Some 88% of advisers in the UK have predicted that sustainable investing will increase dramtically over the next year, with just 12% saying the level of investment will stay the same

According to research commissioned by TIME Investments and conducted by Pureprofile among 52 UK-based professional financial advisers during April 2020, advisers are reporting increased demand for sustainable investing from clients and indicate this is only set to continue.

A huge 92% of advisers said appetite for ESG products had moved higher, and 88% said it would grow significantly over the next 12 months.

Despite the optimism on growth, the current levels of ESG investing remain relatively low; only 27% of advisers said their clients have some form of sustainable investment. However, a third (32%) said they had made an impact investment, providing capital that will be used to make a positive impact on an environmental or social issue, over the past year.

Encouragingly, 86% of advisers said they now incorporate sustainability questions in their client fact finds.

Meanwhile, advisers listed their clients environmental concerns as follows:

  1. The impact of climate change (31%)
  2. Air and water pollution (17%)
  3. Waste management (15%)
  4. Consumer privacy & data security (10%)
  5. Energy efficiency (6%)

As a result, these concerns are reflected in the asset classes they are investing in with the three most popular being healthcare (56%), renewable energy (50%) and housing (40%).

Stephen Daniels, fund manager of TIME:UK Infrastructure Income Fund, commented on the findings: “Climate change is one of the great issues of our era and it is encouraging that our research shows that investors are voting with their feet and choosing sustainable investments in an effort to leave future generations with a positive legacy.”

Recent research from Franklin Templeton also found that advisers saw ESG investing is an opportunity to grow their business as well as deepen relationships with clients. 90% of respondents said responsible investing was a ‘good’ business opportunity, and explained that environmental issues are most likely to engage retail clients when investing  with concerns about climate change, sustainability and resource efficiency, being the top three ESG issues advisers believe will change how people invest over the short and long term.


Natalie Kenway

Natalie is editor in chief at MA Financial covering ESG Clarity, Portfolio Adviser and International Adviser. She was previously global head of ESG insight for ESG Clarity and has been an investment journalist...