Standard Chartered Private Bank has published its Sustainable Investing Review 2020, which reveals a rise in investor interest in sustainable investments amid continued market disruptions due to covid-19.
As many as 90 per cent of investors surveyed said they are interested in sustainable investments, with 42% planning to invest 5 to 15% of their funds in sustainable investments over the next three years.
The Private Bank's third annual survey covered around 1000 investors with a specific focus on affluent and high net worth (HNW) investors in Hong Kong, Singapore, the UAE and UK.
While interest in sustainable investing continues to grow, there remains a significant knowledge gap among investors."
The effect of the pandemic is clearly reflected in this year's findings which highlighted investors' focus on areas that build resilience against future crises. Nearly 50% rated the UN Sustainable Development Goals (SDGs) of Clean Water and Sanitation and Good Health and Well-being as being of higher importance.
This is followed by 43% of investors indicating Climate Action as more important, which edged ahead of Quality Education and Zero Hunger, both at 40%.
Facilitating interests and removing barriers
Consistent with previous studies, this year's survey shows that investors lack knowledge about how to meet social and impact goals that are of interest to them. This continues to impede investors who want to make sustainable investments. Banks play a critical role in providing essential guidance to clients to unlock the growing momentum for sustainable investing. Besides the lack of knowledge, the other top barriers to investment in this segment are apprehension, and lack of motivation and advice.
Standard Chartered said an "interesting nuance shows up in preferences for SDGs among the affluent and HNW investors." While this group of investors shows little distinct preferences for any SDGs, small relative spikes of specific interest is observed with Good health and well-being and Climate Action edging above the others.
In relation to investors' consideration for further investments, the report reveals that affluent and HNW investors are generally willing to consider allocating funds towards sustainable investments, regardless of whether they have previous experience in making such investments.
Didier von Daeniken, global head of private banking at Standard Chartered, said: "While interest in sustainable investing continues to grow, there remains a significant knowledge gap among investors. As a bank, we have a critical role to play in helping to bridge this gap and facilitate our clients' sustainable investing journey and ambitions."
"Knowing how clients' investor personalities influence their investment approach allows us to help unlock any barriers. This is where our Impact Philosophy is useful in giving clients a structured framework to identify social and environmental causes that matter to them, as well as to understand the risks and returns of potential opportunities."