Retail investors prioritising ethical beliefs despite macro climate
Industry affinity is rivalling the possibility of substantial returns as the primary motivation for retail investors, a new Seedrs survey has found.
The European equity crowdfunding platform polled more than 1,200 European individual investors and found that, although 50 per cent are investing less, they are increasing their appetite towards projects and industries they believe in.
Seedrs found that there has been a shift in what is the biggest factor causing retail investors to back an early-stage business. In 2022, 54 per cent of investors cited the possibility of substantial returns, which fell to 47 per cent in this year’s survey.
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This year, 57 per cent of respondents said they were most influenced by “supporting industries you believe in”, while 48 per cent said they wanted to support brands they believe in.
Environmental, social and governance (ESG) credentials continue to be a huge driving force for retail investors. 78 per cent of investors consider ESG factors when making investment decisions and 48 per cent already have ESG-focused investments in their private portfolio.
Seedrs’ 2022 sector report found that investors are increasingly interested in climatetech businesses, funding £40.1m-worth of projects last year. Clean energy was also cited as a popular sector.
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Conversely, finance and payments, food and beverage and crypto all saw decreased interest from last year.
“I’m not surprised that 78 per cent of investors consider ESG when making investment decisions,” said Kirsty Grant, managing director and chief investment officer at Seedrs.
“That’s because ESG focused businesses – like those operating in climatetech and clean energy – continue to go from strength to strength on Seedrs.
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“Climatetech in particular is up an astounding 40 per cent so far compared with 2022, which itself represented a 154 per cent increase from the previous year.”
The Seedrs research also found that net investable assets have decreased across all investor groups. In 2022, 14 per cent of investors surveyed had over £500,000 and 35 per cent had over £100,000 of investable assets. This has fallen to 12 per cent and 30 per cent respectively in 2023.