The pandemic has increased public interest in sustainable investing, according to a survey by Aviva.
The survey of over 500 people with investments found that over half (55%) said that the pandemic had had an impact on their likelihood to take ESG factors into consideration when deciding where to invest their money. Among those who said they already consider ESG, 81% said the pandemic made this even more important.
The research by Aviva also revealed that this is new for many investors, 81% said the pandemic has made choosing sustainable investments more important and just 32% said they have been doing this for over a year.
Lockdown may have stopped many things, but what it appears to have kick-started is an interest in using money as a force for good"
67% said environmental factors are the most important, namely those that related to pollution, climate change, waste and recycling and promoting animal welfare.
Alistair McQueen, head of Savings and Retirement at Aviva, said: "Lockdown may have stopped many things, but what it appears to have kick-started is an interest in using money as a force for good. ESG is growing, fast. Aviva's research suggests that many investors are just at the beginning of this exciting journey. Education and information will be key. At Aviva, we've acted on this insight to enhance our ESG offering, on our website and our investment platforms."
However further research revealed that among 1,000 investors even those who consider ESG with their personal investments very rarely change their personal or private pension funds to align with their values.
McQueen added: "For the first time, 2019 saw a majority of people of working age investing in a pension.But our insight suggests that many people have yet to make the connection between their pension and its investment potential.
"Most people report that they are not choosing to revise their investment options after day one, despite this being a common offering across many pensions. There is a huge potential to engage millions of savers by educating them on the potential of ESG and by informing them on how they can manage their investments throughout the life of their pension."
Overall, 60% of people with private pensions had not taken any action to change where their money is invested since set up, whether to maximise returns, choose funds that reflect their personal beliefs more closely, or invest in companies with good ESG records. The results among those who say they always consider ESG factors are also low, with less than half (40%) saying they have changed to funds which better reflect their personal beliefs.
This represents a sizeable amount of ongoing investment that is not being considered through an ESG lens, even where investors clearly have an interest in these considerations with other financial products.
Fund houses commit to cut emissions by 2050