There is a growing mismatch between investors’ desire for more sustainable savings and where their money is actually held.
Research by Aegon found that 57 per cent of respondents wanted their money to be invested sustainably , but only a third (31 per cent) had taken steps to achieve this.
Aegon found that the majority of people are now concerned about a range of ESG issues. Just under three quarters (72 per cent) are anxious about global warming and other environmental issues, while 61 per cent said they were concerned about societal inequality and 65 per cent worry about poor corporate governance practices.
Significant numbers also take day-to-day actions in support of their beliefs, with 80 per cent saying they recycle, 47 per cent avoiding-single-use plastics, and 37 per cent buying local produce. However, the research suggests that most people don’t invest in funds that have sustainability criteria built in.
While only a third of respondents have invest sustainably, half of savers (50 per cent) don’t know where there money is invested and nearly a third (32 per cent) don’t know where they should invest.
As pension scheme default funds increasingly integrate ESG criteria into mainstream investing, the high level of investors who don’t know how they are invested suggests that many default savers may not be aware of their pension fund’s ESG credentials.
Figures also suggest that the more exposure to sustainable investments that someone has, the more likely they are to feel positive about their savings.
Aegon’s managing director for investment solutions Tim Orton says: “Our research shows that there is currently a missed opportunity for people to align their views on environmental and sustainability issues with their pension savings.
“By supporting people to actively engage with where their money is invested, we can not only help to tackle sustainability issues, but also increase people’s financial wellbeing, aiding broader engagement with their long-term savings plans.
“We also need to recognise that many savers don’t make active investment decisions, but do have strong views on issues of sustainability or social justice.”
He points out that by this summer Aegon will have moved over £15 billion of default assets into strategies that consider ESG credentials.
