The U.S. has the lowest adoption rate of sustainable investing among 10 major markets at 12% of investors, compared with 39% globally, according to the latest edition of the UBS Investor Watch report.
China, Brazil, the United Arab Emirates and Italy lead the charge, with 60%, 53%, 53% and 51% of investors, respectively, reporting sustainable investment holdings in their portfolios.
The study defined adopters of sustainable investments as those having at least 1% of assets allocated to such investments.
Despite low adoption, American sustainable investors had the highest average allocation, with 49% of their portfolio assets dedicated to sustainable investments, compared with the average global allocation of 36%.
U.S. investors in the study expected sustainable investing to grow to 19% over the next five years, up by 58% from the current low level. In fact, 32% of American investors thought sustainable investing would become the “new normal” in 10 years.
The study showed that few investors expected to sacrifice returns when investing sustainably because they viewed sustainable companies as more responsible, better managed and more forward-thinking — thus, good investments.
In fact, 51% of U.S. investors believed returns from sustainable investments would match those of traditional investments, compared with 50% of investors globally, while 19% of Americans expected sustainable investments to outperform traditional investments.
“Investors see sustainable investing as the way of the future,” Paula Polito, global client strategy officer at UBS Global Wealth Management, said in a statement. “Many of the investors surveyed believe that sustainable investments are wise investments and see no need to compromise their personal values for financial returns.”
UBS during the summer surveyed some 5,300 investors with at least $1 million in investable assets in Brazil, China, Germany, Hong Kong, Italy, Singapore, Switzerland, the UAE, the U.K. and the U.S.
The U.S. sample comprised 1,711 investors, including 472 with at least $5 million in investable assets.