The declining appetite for sustainable investing across the sector is a “sad story”, Schroders have claimed.
Schroders latest Financial Adviser survey revealed the continued fall in popularity of ESG among advised investors – a trend that has been apparent particularly over the past three years.
Of the 221 advisers surveyed, the majority (86%) said that less than a quarter of their client base explicitly specify that their investments should reflect ESG factors in some way.
Just 11% said that a quarter to a half specify this, while 4% said that half to three quarters do. Not a single adviser said more than three quarters.
Speaking at the launch of the survey, Schroders head of UK wealth, Jamie Fowler, described it as a sad story, adding: “It’s a real shame it has come to this.
“We are wholly supportive of sustainable investing – it’s something we are really proud of and have been for a very long time. We are right behind it.”
He admitted that there has been a “very strong correlation” between support and performance, and that this has been a factor.
“Whether it needs to see that return in performance profile to create that momentum again, I don’t know. I’m not sure if that’s the answer,” he said.
“When you look back to a couple of years ago, it clearly was being followed more closely. Performance of global equities with sustainability was doing very well. Maybe it’s that correlation that is needed to see that small reversal.”
Schroders investment propositions director Stuart Podmore added: “I think it’s also how it’s been communicated to advisers. Advisers are very much individual thinkers. There is a good reason why they are not working for large corporations in many instances.
“I think the initial communication of it really ramped up during Covid, it was all about ‘you will adopt this because climate change is a real issue’ and I did sense with many audiences a response to that but that certainly hasn’t stopped Schroders from pursuing it.
“In ten years’ time, if we don’t talk about sustainability it could be that we’ve succeeded in a strange and interesting way. It could be that it is so integrated into many of the investment processes that it is just part and parcel of what we do.”
