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A couple of weekends ago, a busy road junction close to my flat was blockaded by a mix of climate change activists, concerned residents and, well, those who simply enjoy a good spectacle and street party of a Saturday afternoon. I live in an area of London where car ownership is low, but air pollution is high; locals understandably feel a sense of injustice when their children are suffering the fumes of through-traffic.
The blockade was organised by Extinction Rebellion (XR), an organisation advocating “disruptive civil disobedience” to hasten political and business action on climate change. The potency of XR and affiliated groups became apparent to me last Friday, when Youth Strike 4 Climate demonstrations took place in cities across the UK. While fossil fuels are a big focus for youth activists, their remit is sustainability more broadly – for example, one of Friday’s blockades (at Oxford Circus, London) was to protest ‘fast fashion’.
While UK youth climate strikers grow in number and become a presence that is harder to ignore, a veteran in the field graces our TV screens for another hard-sitting series on man’s environmental impact. David Attenborough’s Our Planet on Netflix is fascinating and devastating in equal measure. His message is unrelenting: look at the damage we have done to environs and the species relying on them in the last 20 years alone, and think about the serious changes we need to make to save our planet in the next 20 years. Indeed, if the mass walrus death plunge in Episode 2 doesn’t traumatise your children, then nothing will.
Irrespective of your thoughts on the means of message delivery – taking it to the streets or solemn sofa-side sage – it’s hard to ignore the growing salience of the anti-climate change movement in this country.
Yet even against this backdrop, many private investors we have interviewed of late are not tweaking their investment portfolios accordingly. There is still a disconnect between general consumption and investment behaviour, with people happy to pay more for Fair Trade or sustainably-farmed groceries and yet shying away from responsible investing. Paradoxically, they are shying away from funds that will do increasingly well, based on the changing patterns of consumption they speak of.
These private investors, commonly aged 50 and above and with considerable personal wealth, feel like they have a lot to lose if they get their investment decisions wrong. They may have spouses and dependents to think about, or they are looking to fund a relatively long and comfortable retirement. And they believe that there is a trade-off between performance and investing responsibly. Research in Finance has found that 28% of those with more than £250k to invest think that responsible investing is more likely to hinder than improve performance, compared to 11% who hold the opposing view. Of all the private investors surveyed, 37% think it could go either way, 15% anticipate no overall impact on performance and 13% just don’t know what to expect.
So here is our call to action to the investment community: get the message out! If you truly believe that investing responsibly is the way for investors to protect and enhance their savings, start making more noise. Because even though within the industry, we sense ‘ESG fatigue’, this is still all new and baffling to ordinary people planning for their financial futures.
Our Responsible Investment Review report will be published next week. It has been a labour of love following all the exciting developments in this space over the last six months, navigating the nuances in investors’ understanding of and feelings around ESG, and learning lots from responsible investment experts.
Please get in touch if you would like to know more about the Responsible Investment Review. For those who have already subscribed, it will be winging its way to you shortly!
Annalise Toberman, Lead Author of the Responsible Investment Review and Head of Insight, Research in Finance