Globally, 65% of wealthy investors are motivated by sustainable investments, though only 39% hold sustainable investments in their portfolios, according to a report by UBS.
The study found younger investors to be more motivated by such investments, with seven in ten young investors expecting such investments to outperform traditional investments versus one third of investors aged 65 years or above.
The key barriers cited by investors in this regard are quantifying impact, and perplexing terminology.
The study revealed emerging economies including China, Brazil and the UAE having the highest rates of sustainable investing adoption.
Investors in the US and the UK were found lagging in this regard, with only 12% and 20% adoption rates, respectively. However, sustainable investors in the US were found to have the highest average allocation, with 49% of their assets allocated to sustainable investments.
Besides, 82% of investors also expected the returns from sustainable investments to equal or exceed that of traditional investments.
High uptake in emerging economies
The expectation from sustainable investments was found to be remarkably high in emerging economies such as China and Brazil, where 70% of investors believed such investments to perform better than conventional investments.
In the US and the UK, expectation from sustainable investments was 19% and 27%, respectively.
Investors also expected the adoption rate of sustainable investing to grow from 39% today to 48% over the next five years.
Moreover, 58% of investors believed such investments to become the “new normal” in 10 years. Investors in the UAE, China and Italy were the most convinced in this regard.
UBS Global Wealth Management global client strategy officer Paula Polito said: “Investors see sustainable investing as the way of the future. Across all ages, wealth levels and regions, many believe sustainable investing will become a more mainstream approach over time.
“A majority of the investors surveyed believe that sustainable investments are wise investments and see no need to compromise their personal values for financial returns.”