The climate emergency is leading a movement towards impact investing, with 45% of UK investors claiming they would move their money to an ethical fund as a result of news about the environment. More than three-quarters (78%) of younger investors, aged 18-24, would be prompted to move their money to an impact investment fund in response to the climate emergency.
Investors are relatively unaware of the impact of some of the world’s biggest companies on the environment, despite the fact that their money is likely to be invested in them1. Almost three-quarters (71%) of investors are unaware that over 70% of the world’s greenhouse gas emissions have come from just 100 companies.However, 43% would consider impact investing as a way to avoid their money going towards these polluters.
Awareness of impact investing
Triodos Bank’s latest annual Impact Investing Survey finds that awareness of impact investing is higher than in any year since the survey was started in 2016. Still, more than half (55%) of investors have not heard of impact funds – though this is down from 67% in 2018. Almost two-thirds (62%) have never been offered impact or sustainable investment opportunities, down from 73% last year.
Bevis Watts, CEO, Triodos Bank UK, commented: “Investors are waking up to the fact that there really is no such thing as a neutral investment. Every investment has an impact and UK investors are looking for opportunities that allow them to support pioneering and innovative companies making a positive difference in the climate emergency, while receiving good long-term returns. They increasingly recognise the power of money to be a powerful tool for change."
The survey finds that two-thirds (66%) of investors would like their investments to support companies that contribute to making a more positive society and environment. This figure has risen by 11% since 2018, indicating a growing awareness of the impact that money can have on some of the biggest global challenges.
Examples of companies in the Triodos Impact Funds include musical instrument manufacturer Yamaha, Danone, Adidas (for supply chain innovation), packaging company DS Smith and Central Japan Railway.
The climate emergency is shifting investors’ mindsets about the impact their money can have, as the survey reveals.
- 45% would move their money to a different fund if they found it was invested in fossil fuels. In 2018, only 17% of investors said they wouldn’t consider investing in a fund that was involved with fossil fuels.
- Investors would put an average of £3,744 in an impact investment fund, an increase of £1,000 compared to 2018.
- More than half (53%) agree that choosing carefully where you invest your money is one of the best ways to protect the planet. This rises to 76% among investors aged 18-24.
- Three-quarters (75%) agree that financial providers need to be more transparent about where people’s money goes, rising to 81% among female investors.
Hannah Mackintosh is a trainee Chartered Accountant from Bristol and a Triodos Bank customer: “Seeing the power of the fossil fuel divestment movement and the fear it put into the industry really made it hit home how powerful where you invest can be, then realising that there’s a bank that allows you to use your money for good, it was a no brainer to invest with Triodos.”
About impact investing
Triodos Impact Investment Funds invest in a range of stock market listed companies that have a positive impact on society and the environment. Invest in the funds directly or via the tax-efficient Triodos Stocks & Shares ISA.
*This is the fourth year that Triodos has completed a survey looking at impact investing – first conducted in 2016.
1 FTSE 100 companies represent about 81% of the entire market capitalisation of the London Stock Exchange