Are sustainable investments the key to achieving long-term returns? While people who classify themselves as advanced investors answer in the affirmative, those who are less knowledgeable are more critical.
More than two-thirds (68%) of people who classify themselves as experts or advanced investors believe that sustainable investments are the only way to achieve long-term profitability. In Switzerland, as many as 80% of experts say this. However, 84% of Swiss experts also believe that greenwashing is a problem. The older the respondents are, the greater the agreement here. Among those over 71, the figure rises to 94%. This is the result of the current «Schroders Global Investor Study 2022». More than 23,000 investors were surveyed at 33 locations worldwide.
Sustainable investments can support positive change
Despite the challenge around greenwashing, 69% of "experienced" investors share the view that sustainable investments can support positive change when it comes to challenges such as climate change. Again, the level of agreement in Switzerland is significantly higher at 78%. "The results of the Sustainable Investment Returns Survey are encouraging and highlight the important role that asset managers play in addressing challenges such as climate change. We see a strong correlation between long-term sustainable investment returns and solving social and environmental challenges around the world," comments Andy Markwalder, CEO of Schroder Investment Management (Switzerland) AG, on the findings.
Social aspects are gaining in importance
The study further reveals that environmental impact is the main reason why investors are interested in sustainable investments. Compared to previous years, however, social aspects have gained in importance as a reason for investing. Here, the Swiss results stand out: for 55%, social aspects are the most important reason to invest sustainably. Interestingly, "generating returns" ranks only third on the list of priorities. In the last two years, the value fell from 42% to 36%.
Investors wish to invest according to personal sustainability preferences
In addition, investors would invest in sustainable funds if given the opportunity to invest according to their preferences. More than half of investors across all self-defined skill levels indicated that the ability to choose investments that align with their personal sustainability preferences would encourage them to increase their allocation to sustainable investments.
As far as the specific sustainability goals of investors are concerned, education is seen as the most important worldwide. One-fifth of respondents (21%) named this as the top priority. This is also reflected in the Swiss results: Improving education is named as the most important goal.
Poverty reduction is a priority for investors in poorer countries
Poorer countries seem to prioritize poverty reduction over other factors. In India, for example, this is the top priority (21%). "The survey results show that solving environmental problems is one of the main reasons why investors want to invest sustainably. However, the ‹S› in ‹ESG› should not be forgotten, as human capital, education and equality is also an investment and impact objective for many, especially in Switzerland, as the survey shows," explains Adrian Nösberger, CEO of Schroder & Co Bank AG.
Schroders was founded in 1804 and is one of the largest independent asset managers in Europe in terms of assets under management. As of June 30, 2022, assets under management amounted to approximately CHF 900 billion.
