Sustainable Investing at “Tipping Point”: Standard Chartered

Standard Chartered says its latest survey into sustainable investing trends among emerging affluent, affluent and high net worth investors reveals that sustainable investing is at a tipping point, with awareness and interest at an all-time high. It adds, however, that investor apprehensions – with lack of measurement and transparency topping the list – are preventing sustainable investing from becoming more mainstream.

The Sustainable Investing Review 2021, the bank’s fourth study since 2018, revealed an upward trend in sustainable investing among more than 2,000 investors, surveyed in Mainland China, Hong Kong, Taiwan, Singapore, India, the UAE and UK. The allocation of sustainable investments in investor portfolios is on the rise: 13% of investors already have more than 25% of total investments channelled into sustainable solutions, compared to just 2% of investors in 2020.

The research identified trends across a four-stage adoption cycle:

1. Awareness – 82 per cent know what sustainable investing is
2. Interest – 81 per cent show interest in sustainable investing
3. Intention – 40 per cent of those who have not yet invested in sustainable solutions plan to in the future
4. Adoption – 61 per cent have placed funds in a sustainable investment solution

These insights, gathered amidst the ongoing pandemic and increasingly visible impacts of climate change, show that the majority of investors (72%) have a growing sense of responsibility and are looking to do good with their wealth, StanChart says.

In terms of the bottlenecks slowing actual investing, transparency of impact measurement came in at number one, with 69% saying they need more numerical evidence of the impact being achieved from sustainable investments. This was followed at number two by what the bank terms “The shock of the new”, with 51% feeling sustainable investing is simply too new; and at number three by the direct donation alternative, where 43% of respondents believed direct donations  to sustainable causes can achieve a more immediate social outcome. Additionally, 74% of investors also indicated that they could become more comfortable with sustainable investing if advised by a financial expert on their investment decisions.

“With investor interest at an all-time high, we can expect more investment capital to move into sustainable investing solutions, presenting a huge opportunity to address pressing global challenges,” says Marc Van de Walle, global head of wealth management, Standard Chartered. “To ensure we cross the tipping point, it is vital for the industry to collaborate and develop robust governance frameworks and address the concerns with transparency and measurement. At Standard Chartered, we continue to work with key stakeholders and incorporate the latest regulatory requirements as we sharpen our sustainable investing standards and framework for greater transparency.

“The findings also highlighted the crucial role of professional advice,” he continues. “By providing personalised advice according to our clients’ sustainability goals, and access to the most relevant sustainable investment solutions, we can enable our clients to make a positive impact, along with financial returns.”