There is a lot going on in Good money right now. After decades of being lobbied by irritating activists like ourselves, the money men now seem to be arriving at the correct conclusion with gusto: people want to do Good with their money.
This has been the suggestion of numerous surveys conducted in recent years, particularly since 2015, following the signing of the Paris Climate Accord that saw world leaders agree to limit global warming to 2 degrees above pre industrial levels, 1.5 degrees ideally.
However, as compelling as many of these surveys have been, few have had the scope and breadth of the National Conversation currently being conducted by the Department for International Development (DiFID) which has surveyed over 6,000 Britons over the past ten months.
Over this time DiFD has been on a roadshow that has taken in 14 events nationwide and resulted in a further 13 million people being reached through email. That’s A LOT of people – 20 per cent of the entire UK population, in-fact.
And the initial results are in. According to DiFID, two out of three Britons – or more than 60 per cent – want others around the world to have better working conditions and fair wages, and are concerned about climate change and pollution.
So far, so expected. Perhaps more interestingly, though, the same amount of people said that they believe they have a responsibility to make the world better and – to achieve this – want their investment choices to make a difference.
Rather be poor than bad
Again, perhaps not too shocking for a yes or no question. The killer stat, though, is this one: Nearly 40 per cent of people with over £25,000 saved up said they would accept a lower return if it made a difference to something they really cared about.
That’s right: nearly half of Brits say that they would lose money if it meant that they were investing in companies and projects that make the world a better place.
Now, regular readers of Good With Money will know that these respondents needn’t fear: with evidence mounting to show that investments in companies that work with people and the planet, make more money than those in firms that work against us.
Commenting on the findings, Ben Faulkner, head of communications at Good Egg company EQ Investors says: “It’s great to see that people are increasingly aware of issues like climate change and would like to make a difference through their investments.
“Sacrificing returns is one of the common misconceptions around doing good with your money, though. By targeting sustainability themes that by definition are long-term societal needs, impact investments also have much greater long-term return growth potential. And the sustainability of investment returns should matter for long term investors.”
BUT: principles equal profit!
What is really important about this statistic, is that these are not just wealthy philanthropists pooh-poohing a £20,000 loss they can write off against their taxes anyway. These are average people with savings below the average pension pot size; families with children; young people just about making the rent – real Britons.
And despite times being pretty tough in the UK – despite a decade of stagnant wages, public service cutbacks, zero interest rates and now rising inflation, these people would rather lose cash than fund climate change.
Again, though, as founder of impact investing app tickr Tom McGillycuddy insists, this really isn’t necessary: “I think the sentiment here is great, but it highlights that people still think you need to give up returns to do good with your money, and that’s just not the case. As the sector develops this will become evident, and more and more people will invest this way as their default option.”
Leaving Las Vegas
The 60 per cent also said that, in their opinion, financial institutions should avoid investing in companies that harm people or the planet. Meanwhile, more than half of survey respondents (54 per cent) said that lack of information was holding them back.
The message is now coming through loud and clear: banks, asset managers and insurers need to be doing much, much more to inform people where their cash, savings and pensions pot money is going.
And, more importantly, big money need to start pulling out of destructive industries because – not only are financial institutions not avoiding investing in harmful companies, they’re bankrolling them. And losing money for their investors – i.e. you and me – in the process.
John Fleetwood, founder of leading sustainable fund analyst 3d Investing, adds: “These results give a very clear message that investors really do want to use their money to do good and avoid harm.
“Its particularly striking that 40 per cent of investors with more than £25,000 to invest are prepared to sacrifice an element of return to do so even though all the evidence shows that this may not be required.””
While we continue to do what we can to bust these myths and spread the Good news, DiFID is continuing to talk and is inviting people to join in the national conversation.
The government body says: “Everyone can play a part in ending poverty. Governments, charities, businesses, and people around the world are playing a role.
“The financial industry is developing products that aim both to create good financial performance and positive impact on the world. We want to hear from people in the UK about how they want to invest today to build the future of tomorrow.”