As more advisors integrate impact investing into their practices, a recent Cerulli Associates study found that 58% of high net worth practices currently use environmental, social governance/socially responsible investing and plan to increase their allocations over the next 12 months. That said, 20% stated they don’t use ESG/SRI and have no plans to going forward.
The most important reasons for using ESG/SRI, according to the survey, include environmental concerns (69%), desire to make an impact with their wealth (54%), and ethical concerns (52%). The study also found that 22% of HNW practices using ESG states clients also want sustainable returns.
“HNW investors are starting to realize that investing for financial return and investing to make an impact are not mutually exclusive,” according to Asher Cheses, a research analyst with Cerulli.
Cheses also noted that HNW and multi-family offices are set up to pass down wealth across multiple generations. While many may have started with negative/exclusionary screening (e.g. tobacco, weapons) they have evolved into using more integrative strategies.