UK investors eschew ESG for profits amid cost-of-living crisis
Brits are less focused on the ethical, environmental and social impact of their investments than they were 12 months ago as they are prioritising profit, new research has shown.
38 per cent of UK investors said that ethical and green investments were important to them, down by six per cent from last year, according to the Investor Index.
The annual survey, which is conducted by communications agency AML Group and the research and planning experts, The Nursery, polled 1,100 UK adults who have a minimum of £10,000 invested.
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The research also found that interest in vegan-friendly investments dropped sharply from 38 per cent to 22 per cent this year, while LGBTQ+ focused investments fell by four per cent. The demographic least focused on ethical investing is those aged 65 and over, with only one-quarter (24 per cent) prioritising ethical investments.
“The shift we’re seeing away from ESG priorities can be interpreted in several ways and will be an important trend to watch in the coming years,” said Pauline McGowan, head of strategy at The Nursery.
“In qualitative sessions, younger investors told us that they wanted their investments to do good for the world but not at the expense of personal gain. The areas they were most interested in supporting were new green initiatives and future focused tech solutions like AI and robotics, but fully expect that these are good for profit as well as people and planet.
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“There was less belief in the likely return from areas such as vegan and LGBTQ+ friendly investments but the findings do not necessarily show a drop in care about these causes, but rather that they can be supported in other ways, not necessarily investment.”
The Investor Index also revealed that 54 per cent of respondents have recently opened a high-interest savings account – unsurprisingly, given the increase in savings rates – and 23 per cent took money out of other investments to fund it.
When it comes to financial guidance, the study revealed that UK investors are more likely to rely on their own research, with 54 per cent eschewing financial advice – up 11 per cent from last year.
Among those who have never paid for financial advice, 29 per cent of investors believe they can get all the information they need online. Investors also feel that the cost-of -living crisis has taught them what they need to know about investing, with 79 per cent of younger investors (aged 18 to 44) choosing to go it alone.
Read more: Brits believe they lack the knowledge to invest
“In this, our 4th annual study, we’re seeing the cumulative effect of relentless bad news – pandemic, war, cost of living – in increasing investors’ belief in their ability to make investment decisions – be they prioritising away from ethical for now or simply minimising risk, adding high interest savings accounts or keeping their portfolios the same,” said Christian Barnes, head of strategy at AML. “Self-reliance is the new selfishness.”
