ESG investment is set to double in 2021 as investors plan to move funds to support companies with a positive ESG rating or impact, a new report has revealed.
The study by OnePlanetCapital, a new sustainability driven investment house focused on climate change, revealed that 9% of investors currently hold ESG investments.
OnePlanetCapital’s findings indicated the market is set to double this year with 12% of investors who do not currently invest in ESG planning to move investments to ESG related funds in 2021.
Furthermore, an additional 17% of investors are planning to move to ESG in 2022 or later, which OnePlanetCapital suggested shows the potential the market has to grow in the coming years.
The findings, based on a survey of 2,005 UK investors conducted in February, also showed that even of those who do not plan on moving investments to ESG this year or next, two-fifths (40%) are still considering moving them in the future, which is a higher proportion than those who are not considering moving them at all (30%).
OnePlanetCapital suggested ESG has become a “key factor” for investors when making decisions about their portfolio, with the report indicating that investors are becoming increasingly concerned about global environmental issues such as climate change. The findings found that 28% of investors would consider riskier or higher return investments that tackle climate change, over safer, more traditional stocks.
“We are hugely encouraged to see a real desire amongst the investor community to invest in ESG as we plot a course for the post-COVID economic recovery,” commented OnePlanetCapital co-founder, Matthew Jellicoe.
“ESG is highly regarded among investors. The world is waking up to both the positive and negative influences that businesses can have on the environment, and a company’s ESG credentials, or lack of, is not going unnoticed by investors.
“Our research shows that over a quarter of the investor community said they would be interested in taking on ‘riskier’ investments if they felt they would have a positive impact on the climate.
“It is now clear that investment performance does not need to be sacrificed in order to tackle the environmental problems of the day. UK sustainable funds are likely to outperform the market over the short, medium and long-term.”
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