‘Clear disconnect’ between investors’ climate concerns and investment actions

There is a ‘clear disconnect’ between investors’ levels of concern about climate change and desire to invest aligned with net zero and their actual investment actions, analysis from Quilter has shown.

Its study of a consumer panel found that 74 per cent of investors were worried about climate issues but only 14 per cent were knowingly investing in funds with targets to reduce greenhouse gas emissions.

More than two fifths (43 per cent) of respondents were unsure whether they were invested in such a fund.

Quilter said the disconnect between everyday life and consumers’ investments was “stark”, with 67 per cent reducing their home energy consumption to help address climate change and 60 per cent limiting food waste.

However, the desire to invest in a sustainable and responsible way was still clear, as 44 per cent of investors thought their investments should play a role in achieving net zero emissions.

Furthermore, 42 per cent of respondents said they would like the option to invest in companies that are enabling the green transition.

Half (50 per cent) believed it was important to understand the climate emissions of their investments.

Quilter said they felt the findings showed there was an opportunity to realign people’s desire to invest in responsible and sustainable funds with their understanding of specific fund objectives.

“This data clearly shows that people understand that their investment choices can impact climate change - and are impacted by it, just as their everyday lives and activities are,” said Quilter head of responsible investment, Ido Eisenberg.

“The intention is there, but there is currently a gap with how people approach their investments. People want there to be a stronger connection between their investments, climate change and decarbonisation and that needs to be better enabled by the investment industry.

“Part of this is an education piece, but as an industry we need to keep making it easier for consumers to research and understand what responsible and sustainable funds are setting out to achieve. There have been positive steps in this regard through clearer labelling and thorough education, and we are making it a priority to work closely with advisers to help close that gap.

“There is enormous potential here. People want their investments to play a role in the transition to net zero, and they want the option to back companies driving the green transition, and avoid those high polluters with no plans to change. We need to approach this head on, therefore, and ensure people are given that choice and understanding.”

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