“Large, unmet demand” for positive investing, study finds

Written by Rebecca O'Connor on 22nd May 2017

A lack of knowledge, understanding and confidence is holding back nearly half of would-be “positive” investors, despite a desire for their investments to do good.

New research has found that 20 per cent of the eligible population already invest positively, while a further third (31 per cent) are interested in doing so, with those under 40 demonstrating the most interest and belief in positive investment.

Improving health and social care and having an impact locally were the top motivators, according to Ethex, the positive savings and investment platform that conducted the research, however half do not feel they know enough about the options.

Ethex said the results, which follow the launch of the Good Egg kitemark, demonstrated a “large, unmet demand in society”.

 

The research highlights that there is an urgent need for the industry to provide more information and better education about these kinds of investments. 50 per cent of those asked did not feel they know enough about positive investment and savings, although 45 per cent were willing to learn more.

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More than a third (39 per cent) did not know whether to expect a stronger or weaker financial return from positive investments when compared to traditional ones and 55 per cent did not think they were wealthy enough to make positive investments.

While people under 40 were the most interested, those who currently invest positively are significantly older and wealthier, suggesting that the message of positive investment is currently only reaching a select group of society. 

Demand for local, social and simple products

When it comes to the kind of projects people are interested in supporting, positive investments that improve health and social care (31 per cent) and old age support (26 per cent) are most popular. The majority (58 per cent) would also prefer positive investment to have an impact in their local area.

Savers want simpler, accessible positive investment products with 44 per cent expressing interest in taking out or switching to a positive savings account, 43 per cent a current account and 40 per cent an ISA.

Triodos Bank recently launched the UK’s first sustainable current account; meanwhile Abundance Investment, recipient of one of the first two Good Egg kitemarks, recently launched the first green ISA.

Lisa Ashford, Director and CEO of Ethex, said: “Consumers are increasingly looking to buy and use products that align with their personal values and it is no different when it comes to savings and investment. People are also waking up to the fact that it is possible to use their personal wealth to both make money and benefit society.

“Our research clearly demonstrates that interest in positive investment in the UK is high, with those under 40 particularly engaged. However, there is also much confusion and misunderstanding around investing positively. Providers of these products have a lot of work to do in educating people, as well as meeting the growing demand for positive investment products.

“By offering a wider range of more accessible products, positive investment can be opened up to enable more people to tackle the local issues that matter to them the most. This will help change positive investment from a minority pursuit to a mainstream one and by doing so deliver on the benefits that investing in this way can bring.”

Camilla Parke, Strategy and Market Development Associate at Big Society Capital, adds: “This research indicates there is real unmet demand for individuals to use their savings and investments to address the issues they care about. At Big Society Capital, we believe this investment could have a significant impact on the organisations working to solve some of the most pressing challenges society faces. Platforms like Ethex are already making this possible. There is more to do to bridge the gap from intention to action – particularly by tapping in to the energy of the next generation of positive investors. Raising awareness and providing simple, accessible products are key parts of the solution to building a mass market of positive investors”.