Studies have showed the increasing growth of institutional investors using socially responsible investing. Indeed, even Larry Fink, CEO of BlackRock, recently predicted that the future of investment is in sustainability, and that ETFs that focus on ESG will grow to $400 billion from today’s $25 billion in the next 10 years, according to the Financial Times. But are financial advisors following this lead?
A recent Eaton Vance Advisor Top-of-Mind Index (ATOMIX) survey of 618 advisors found that 79% did incorporate SRI investing into their practices, and of those, 44% said it was an important part of their practice, which is up from 31% from only six months ago.
Further, 35% reported increased interest from clients, while 60% stated SRI is an “ongoing topic of discussion.”
The online survey, taken from Aug. 20 through Sept. 7 of 2018, was done in conjunction with Calvert Research and Management, a $15.3 billion mutual fund that has large focus on SRI investing.
Others findings include:
- More than half (56%) said that SRI is driving new business to their practices.
- Only 35% classified themselves as “very well-informed” about SRI.
- A majority, 87%, stated “robust research” is needed for ESG analysis, however, 67% said it is difficult for investors to get “measurable quantitative sustainability data” from companies. This complaint also surfaced in another study of institutional investors by RBC.
- A majority, or 93%, of advisors said demonstrating the impact of ESG investing is important to investors.
- Active roles in ESG outcomes also are important, as 82% of advisors stated it’s important to engage with company leadership to drive positive outcomes.
“Responsible investing strategies allow advisors to take a more holistic approach to wealth management with their clients,” said Anthony Eames, director of responsible investing strategy at Calvert, in a statement. “As responsible investing gains in popularity, there’s increased dialogue between advisors and their clients.”
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