Investors demand hard evidence of impact, and a smile

Written by Lori Campbell on 12th Dec 2018

More than half of UK investors demand hard evidence that their savings are making a positive social or environmental impact, while tomorrow’s investors want to see us all be a bit nicer to each other, according to a new study shared exclusively with Good With Money.

The report by AXA Investment Managers (AXA IM) found that 52 per cent of investors polled in a survey want to see proof that their money is being used in a socially responsible way.

Investors have a growing appetite to see the tangible results of their investments

Matt Christensen, AXA IM’s Head of Responsible Investment, said: “We found that investors have a growing appetite to see the tangible results of their investments, that their money is making a difference – an impact!”

For 38 per cent of respondents this means getting certification from a trusted industry or government body, while 10 per cent want an endorsement from a well-known expert in ethical investment.

Future trends

Of the 2,001 adults surveyed, 48 per cent said green technology was the area they would most like to invest in. Sustainable consumption was the top choice for 37 per cent while 31 per cent opted to support climate change action.

A fifth (20 per cent) said they would like their savings to be put into investments that provide a long-term positive impact on society.

The report also revealed that younger generations are also interested in being socially and environmentally responsible.

All you need is love

Of the 120 children (aged eight to 15) surveyed, 40 per cent saw recycling as a key means to protecting the planet, 25 per cent would like to see a reduction in the amount of plastic used and 25 per cent said they wanted to invent a cure for diseases.

Meanwhile, a third of children (33 per cent) want to make the world a better place by encouraging people to be nicer to one another.

It is very encouraging to see that the investors of tomorrow are so focused on acting responsibly

Mr Christensen said: “Our research has found that responsible investing is moving away from the niche and into the mainstream, even among younger generations. Clearly impact awareness is growing, and it is very encouraging to see that the investors of tomorrow are so focused on acting responsibly.”

Generation ethical

Younger generations are increasingly making choices based on ethical values. The new report comes after YouGov data revealed that in the past year alone, the number of 18 to 24-year-olds turning to vegetarianism for environmental or welfare reasons increased from nine to 19 per cent.

Mr Christensen said AXA IM is continuing to develop its impact investing strategy range to go beyond monitoring for environmental, social and governance (ESG) factors. He said: “It will also encompass positive contributions to the needs addressed by the United Nations sustainable development goals (SDGs) – ending poverty, protecting the planet, and prosperity for all.

“AXA IM has also created an innovative investment framework that balances the double objective of creating positive social impact and financial returns.”

Quantifiable evidence 

The AXA IM impact framework aims to meet consumer demand for evidence that their money is doing good. As well as defining its impact targets in line with the UN’s SDGs, it will provide quantifiable evidence of the social or environmental impact of its investments.

The framework is based on three broad territories of impact including social impact (e.g. healthcare or education), environmental impact (e.g. climate change or sustainable living) and economic impact (e.g. livelihoods or productive infrastructure).

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