Sustainable and responsible investments are now regarded as ‘safe havens' by the majority of investors, according to deVere Group.
DeVere reports that 56% of clients who seek to include environmental, social and governance (ESG)-orientated investments into their portfolios do so citing that such sustainable funds offer financial protection in times of uncertainty.
A safe-haven asset is a financial instrument that is expected to retain, or even gain value during periods of economic downturn. And ESG is
All the latest research underscores that the majority of environmental, social and governance investments have outperformed their non-sustainable counterparts this year and have had lower volatility," - deVere CEO Nigel Green
something that Nigel Green, pictured left, deVere Group's CEO and founder, says that the company has seen a "massive surge from clients this year looking for such investments.
"More than a quarter of all clients are currently considering or are already actively engaged in responsible, impactful and sustainable investing," said Green.
"It's a phenomenon that's particularly prevalent with millennials, with eight out of 10 putting ESG credentials at the heart of their investment decision-making process."
He continues: "However, what is perhaps particularly interesting are the reasons why investors are seeking ESG in the first place.
"Of course, the global public health crisis has acted as a wake-up call in many respects. It has prompted a growing collective awareness of mutual responsibility that fits perfectly into the narrative of ESG investing.
Green admits that it is surprising that the majority [56%] of deVere clients now say that they perceive ESG investments as the new safe-haven asset class, though he states that this view is correct.
"All the latest research underscores that the majority of environmental, social and governance investments have outperformed their non-sustainable counterparts this year and have had lower volatility.
"This cannot be ignored by retail - and increasingly institutional - investors who are looking for resilience in these highly unusual times of this new era," he added.
Previously, the deVere CEO has commented that the trend for ESG is only likely to intensify as millennials, who are statistically more likely to seek responsible investment options, as they become the major beneficiaries of the largest inter-generational transfer of wealth. There is an estimated $30tn in the next few years expected into both retail and institutional ESG investments.
Green believes that ESG is also now something for the 'traditonalist' investors as well.
"The data shows that the view held by traditionalists who claim ESG investments are ‘nice to have' but not ‘a need to have,' falls apart under scrutiny in the virus-driven global economic downturn," he added.
"And whilst this short time frame is not determinative, those investors citing ESG's safe-haven credentials are, for now at least, being proven right."