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Portfolio > Portfolio Construction > ESG

Americans Say Investments Play Role in Addressing World Problems: Schroders 

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What You Need to Know

  • Sixty percent of the U.S. sample, and 70% of millennials, said investment managers and major shareholders should be responsible for mitigating climate change.
  • Sixty-three percent thought investment managers and major shareholders should be responsible for mitigating social inequality, versus 55% globally
  • And 68% would react positively if all their investments were in sustainable funds if levels of risk, diversification and fees remained the same.

U.S. investors, particularly millennials, are concerned about how the companies they invest in behave, according to Schroders’ annual global investor survey, released Thursday. 

In this year’s survey, U.S. respondents, more so than their global counterparts, believe that investors and managers can play a part in solving the world’s problems, specifically after the pandemic, which increased some investors’ concern about environmental and social issues. 

Sixty percent of the U.S. sample, and 70% of millennials, said investment managers and major shareholders should be responsible for mitigating climate change, compared with 53% of investors globally. 

Sixty-three percent thought that investment managers and major shareholders should be responsible for mitigating social inequality, versus 55% globally, while 67% thought they should be responsible for lessening poor corporate governance, compared with 61% globally). 

“In the political sphere, in the media and within the financial services industry, the role ESG should play in portfolios is being hotly debated,” Sarah Bratton Hughes, head of sustainability in North America at Schroders, said in a statement. 

“However, managers and major shareholders need to recognize how changing consumer preferences will shape investment decisions and company performance and be able to provide tangible evidence that their allocations are truly making an impact.”

Raconteur Media and iResearch conducted an independent online survey between March 16 and Aug. 2 among 21,147 non-retired and 2,803 retired people, including 1,500 Americans, in 33 countries around the world. The research defines “people” as those who plan to invest at least $11,600 (or the equivalent) in the next 12 months and who have made changes to their investments within the last 10 years. 

Holding Bad Actors Accountable 

Americans in the survey were more likely than investors globally to want to withdraw funds from companies involved in a scandal related to these areas:

  • Financial or accounting: U.S., 69%/millennials,71%; global, 65%.
  • Climate change catastrophe: U.S., 65%/millennials, 71%; global 60%.
  • Human rights: U.S., 65%/millennials, 70%; global, 59%.
  • Treatment of workforce: U.S., 65%/millennials, 69%; global, 56%.
  • Data privacy/cyber hack: U.S., 64%/millennials, 69%; global, 61%.
  • Internal culture: U.S., 58%/millennials, 65%; global, 49%.

Schroders noted that treatment of a company’s workforce is a particularly timely concern of U.S. investors, given discussions around ongoing labor shortages in the country, and debates over raising the minimum wage and other employee benefits. 

It said this heightens the reason why investors should consider a “Quality Jobs” framework when analyzing companies. 

Keen on Sustainable Investing 

The survey found that U.S. investors are eager to incorporate sustainable investing into their portfolio, with 1 in 3 hoping their financial advisor will present more information regarding sustainable funds. 

Moreover, 68% said they would react positively if their financial advisor were to move all their investments into sustainable funds — if the levels of risk, diversification and fees remained the same. 

“ESG is no longer a niche investment strategy and has firmly cemented its place in mainstream investing,” Bratton Hughes said. “Individual investors are recognizing that sustainable investing will not only allow them to fund positive change in the world, but also help them enhance risk-adjusted returns by avoiding pre-financial risks associated with climate change, human capital management, poor governance, and other factors.”


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