Assets under management in UK green and ethical funds have almost doubled to £61.12 billion in just 12 months, as a survey by Hargreaves Lansdown finds that misunderstandings are stopping people from investing sustainably. Meanwhile, a green energy surcharge is set to be applied to household gas bills, children in Glasgow are to plant 17,000 oak trees ahead of COP26, and 9 in 10 people say they would be ‘unhappy’ if their pension was invested in companies with poor social, governance or environmental records. It’s the Good With Money weekly newsbrief.
Investment in sustainable funds almost DOUBLES in 12 months
Assets under management in UK green and ethical funds have almost doubled to £61.12 billion in the last 12 months, according to new figures from the EIRIS Foundation.
The total, up from £33.5 billion in 2020, reflects the increased interest from both consumers and the financial sector in sustainable investment. In 1989 that figure was £199 million, and in 1996 reached £1 billion for the first time.
Peter Webster, CEO of the EIRIS Foundation, said: “It is worth pausing to reflect on the scale of this increase in green and ethical funds: last years’ growth nearly matches that of the whole 35-year history of such funds put together; total assets now exceed all but the very largest UK pension schemes.”
The Foundation, a responsible investment charity, announced its annual market estimate in advance of Good Money Week 2021, an annual campaign aiming to raise awareness of sustainable and ethical investment and finance.
Misunderstandings stop responsible investing
More than half (52 per cent) of people say getting the best possible investment returns is more important to them than investing responsibly.
A survey by Hargreaves Lansdown found that this was particularly the case with people coming up to retirement, with 64 per cent of those aged 45 to 54 and 60 per cent of 55 to 64-year-olds prioritising investment returns. When asked why responsible investment was not important to them, 35 per cent of 55 to 64-year-olds said they didn’t think they would make as much money if they invested responsibly.
This is despite mounting evidence, including the latest Good Investment Review, showing that ethical funds perform better on average than their peers.
A third of 65 to 74-year-olds and 41 per cent of those aged 75 and over said they helped the planet in other ways. This compares to 11 per cent of 25 to 34-year-olds. Overall, Hargreaves Lansdown found that a fifth (21 per cent) of people rejected responsible investment because they think it’s “just a fad”.
UK green energy surcharges set to switch from electric to gas bills
A green energy surcharge which is applied to household electricity bills will instead be added to gas bills as part of the government’s net zero drive.
The draft policy, which would be phased in over a period of up to 10 years, comes as household energy bills are increasing sharply with a global gas shortage raising prices for energy providers.
The surcharge would see customers with gas boilers pay more than those who use electricity to heat their homes or drive electric cars. The heating of homes and workplaces, for which gas is heavily relied upon, accounts for almost one-fifth of the UK’s carbon emissions.
Children to plant 17,000 oak trees ahead of COP26
More than a thousand schoolchildren have been invited to create a woodland ahead of the COP26 climate summit in Glasgow.
The Glasgow Children’s Woodland project will see 17,000 oak trees planted by children from 151 schools on a 13-hectare site in the Scottish city to inspire world leaders to take action on the climate.
The first woodland of its size to be planted in Glasgow in generations, the project is expected to remove 6,000 tonnes of CO2 from the atmosphere over its lifetime.
COP26, starting on October 31, is seen as the most important UN climate meeting since Paris in 2015, when countries agreed to the goal of keeping global temperatures at 1.5C above pre-industrial levels by the end of the century.
However, a recent UN review found that countries’ current climate commitments would see global emissions increase by 16 per cent by 2030, when compared to 2010 levels.
9 in 10 people would be ‘unhappy’ with an unsustainable pension
Nine in 10 people would be ‘unhappy’ if their pension was invested in companies with poor social, governance or environmental records, a new study shows.
One in three (34 per cent) of pension savers want their provider to be ‘more transparent’ about the companies that their funds are invested in, according to the survey of 1,612 UK adults with a workplace or personal pension.
The study on pension ethics for independent price comparison website NerdWallet coincides with Good Money Week (4th-8th October), which promotes awareness of sustainable, responsible and ethical investments.
However, most workplace and personal pension holders are optimistic about the power of their pension, with 82 per cent agreeing that investing their pension ethically has the potential to influence how companies behave.