Sixty-five per cent of investors would prioritise responsible investing over a desire to “simply maximise” their financial return, according to new findings from Close Brothers Asset Management.

The adviser recently conducted a survey of more than 2,000 UK investors who currently have a mean average of £320,000 invested, and found that just 35% identified as “traditional” investors answered that “my only priority is to maximise my financial return”.

Close Brothers also suggested there is a gender divide, with 40% of male investors considering themselves “traditional”, compared to 31% of women.
 
The study examined whether investors think that they need to sacrifice financial returns in order to invest sustainably, and the findings showed that a majority 85% believe investing sustainably will either improve, or provide the same returns, as traditional investing.
 
However, despite the growth of interest and awareness of responsible investing, Close Brothers believes there is a significant knowledge gap when it comes to vocabulary, and head of investment business development, Darren Saddler, said that the research demonstrates what “many have suspected for some time”.

“Significant numbers of UK investors prioritise responsible investing, but their understanding around it is very limited,” Saddler commented. “This should be of concern to the industry as our findings point to a significant knowledge gap in a world where terminology is critically important.”

Close Brothers revealed that just 18% of investors from the study knew what the term ‘SRI’ means, while three-quarters of investors weren’t confident in their understanding of “impact investing”, “ethical screening”, “greenwashing” or the “UN Sustainable Development Goals”.

Saddler added: “While it is reassuring that those investors who have a financial adviser are more likely to understand key terms like ESG and SRI, the fact is far too few have a real grasp of these phrases.

“It is vital that advisers are able to meet the demand for responsible investing while also being able to clarify industry jargon for their clients, so they can make informed decisions moving forward.”

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