Investors give cold shoulder to sustainable investments despite COP26

Investors are failing to prioritise sustainable and environmental investments, despite COP26 and government action to tackle climate change, research suggests.

A survey of more than 800 UK-based investors, all of whom have investments worth in excess of £10,000, excluding their property, savings and pensions, found that less than half consider sustainable investing to be a priority in their portfolio management. Picture: Jon Savage

A survey of more than 800 UK-based investors, all of whom have investments worth in excess of £10,000, excluding their property, savings and pensions, found that less than half (45 per cent) consider sustainable investing to be a priority in their portfolio management.

The research found that a significantly higher proportion - 60 per cent - of younger investors (aged 18-34) said that sustainable investing is important to them, compared to just 30 per cent of those in the over-55 demographic.

When asked about their investment strategies for the coming year, 52 per cent of younger investors stated they plan to invest in more sustainable assets under management, in contrast to only 12 per cent of over-55s.

Giles Coghlan, chief currency analyst at trading broker HYCM, said: “If recent COP26 discussions and government efforts to curb climate change have made anything clear, it is that we are in the midst of a climate crisis.

“However, our research shows that investors are in no rush to hop on the ESG [environmental, social and governance] bandwagon, potentially due to concerns surrounding greenwashing or the performance of sustainable investments.

“At the moment, investors remain broadly sceptical about ESG, and at least in the short-term, all bets are off that we will see any immediate investor activity off the back of the summit.

“But that said, it is important not to make any sweeping statements about the ESG landscape,” he added.

A message from the Editor:

Thank you for reading this article. We’re more reliant on your support than ever as the shift in consumer habits brought about by coronavirus impacts our advertisers. If you haven’t already, please consider supporting our trusted, fact-checked journalism by taking out a digital subscription: www.scotsman.com/subscriptions