The Coronavirus pandemic has increased interest from UK investors in ESG according to a survey by Aviva.
The survey of over 500 Britons with investments found that over half (55%) said the Coronavirus pandemic had had an impact on their likelihood to take ESG factors into consideration when deciding where to invest.
Of those surveyed who said they already consider ESG factors, 81% said the Covid-19 pandemic had made these factors even more important.
According to the survey, 49% of investors have only begun to consider ESG factors over the last six months.
Figures from Aviva's Consumer Platform saw ESG investing has increased since March. The value of new investments in ESG funds in the six months since March has more than doubled compared with the preceding six month period. Investing in other types of funds, meanwhile, has remained steady.
However, according to Aviva, switching pension funds to ESG is still rare. Overall, 60% of people with private pensions had not taken any action to change where their money is invested since set up, whether to maximise returns, choose funds that reflect their personal beliefs more closely, or invest in companies with good ESG records. The results amongst those who say they always consider ESG factors are also surprisingly low, with less than half (40%) saying they have changed to funds which better reflect their personal beliefs.
Alistair McQueen, head of savings and retirement at Aviva, said, “Lockdown may have stopped many things, but what it appears to have kick-started is an interest in using money as a force for good. ESG is growing, fast. Aviva’s research suggests that many investors are just at the beginning of this exciting journey. Education and information will be key. At Aviva, we’ve acted on this insight to enhance our ESG offering, on our website and our investment platforms.
“For the first time, 2019 saw a majority of people of working age investing in a pension. Investing is now a majority sport. But our insight suggests that many people have yet to make the connection between their pension and its investing potential. Most people report that they are not choosing to revise their investment options after day one, despite this being a common offering across many pensions. There is a huge potential to engage millions of savers by educating them on the potential of ESG and by informing them on how they can manage their investments throughout the life of their pension.”
The Aviva survey was conducted by Big Window Research, in August 2020. They surveyed 503 private investors.
Aviva are not the only fund manager increasing their focus on ESG. Close Brothers Asset Management (CBAM) today launched two new sustainable funds which aim to generate consistent long-term returns by screening out unethical practices while focusing on investment opportunities with positive ESG and sustainability records.
CBAM said demand from advisers is one of the reasons they chose to develop the actively managed funds.
Financial Planners have also been jumping on the ESG bandwagon. Last week Cheshire-based Equilibrium Financial Planning, which manages £1bn for clients, committed to invest client money only in fund groups that meet ESG criteria.