What You Need to Know
- While 72% of clients surveyed are interested in ESG investments, 87% said their advisor hasn't suggested them.
- Fifty-nine percent want their investments to address issues such as climate change or diversity, equity and inclusion.
- Half of respondents aged 20-25 had sustainable investments, but none had received suggestions about them from their advisor.
A recent survey by FlexShares Exchange Traded Funds found that 72% of investors are interested in environmental, social and governance focused investment strategies. Women and young investors are most likely to be interested in these investments.
Yet 87% of respondents said their advisor had not suggested sustainable or ESG investments. Instead, investors said their primary sources of information are the media and their own research.
FlexShares ETFs fielded the survey in November to 285 consumers working with a financial advisor, each of whom had a minimum of $100,000 in investable assets and a minimum annual household income of $100,000.
Total assets in U.S. sustainable funds topped $300 billion in mid-2021, nearly double the amount one year earlier, according to Morningstar.
Investors in the survey reported several reasons for their interest in these investments.
Sixty-nine percent said they want to align their investments with their values; 59% want to address priorities such as climate change or diversity, equity and inclusion; and 45% want to capture growth potential from sustainable business practices.
Investors still have a limited understanding of sustainable investing. Forty-six percent of respondents said they had heard the term but were not quite sure about it, and 20% did not understand it.