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The Era of Responsible Investment

12th November 2020 Print

Financial trends always change as the world changes around us and this is partially evident in recent times with the coronavirus pandemic, social issues and environmental disasters having a huge impact on just about every area of life. In the current climate, it is evident that there is an appetite for sustainable and responsible investment opportunities as many High Net Worth Individuals (HNWIs) become increasingly aware of their growing sense of responsibility.

Growing Sense of Responsibility

This is something that was recently discovered by experts at Saunderson House, an independent financial advisor helping people to make smarter financial decisions. Their research showed that there is a growing sense of responsibility and desire to act in line with personal values in a time where there is a lot of hardship all around the world. It is evident that many of the issues of HNWIs has changed and this year they include a deterioration in the wellbeing in other walks of life, fallout from the pandemic and the potential impact on future generations.

A Win-Win Situation?

Many investors are now turning to responsible and sustainable investment opportunities in order to help to improve the lives for future generations, especially when climate change and other global issues are so prevalent in the world right now. Of course, many of these sustainable investment opportunities can lead to higher returns too so it is a win-win situation for investors that are looking to do good with their money while continuing to build wealth.

Generational Opinions

49% of respondents to the survey stated that they agreed that they had a duty to use their wealth in a responsible way to improve the environment and society while as many as 66% agreed that ESG investments should form part of their investment portfolio. As you might expect, there are some differences between generations with younger generations feeling a stronger sense of responsibility, but many from older generations felt that it was important too along with good business sense.

Flexitarian Investing

There is a shift towards a ‘flexitarian’ approach to investments where a select part of an investment portfolio is dedicated to responsible investing but there are a few key barriers for investors, including knowledge, understanding and access to information.

The many shocking events of 2020 has led to a sharp rise in responsible and sustainable investments which is fantastic to see, plus it also offers good opportunities for investors as the world become more aware of the issues around the globe and taking action to make things right.