The Next Economy
Majority of UK Investors Call for Label to Certify Ethical Investment Options

A survey conducted by ethical investment specialists Triodos Bank of UK investors has revealed an overwhelming interest in increasing ethical investment options, while a surprising majority revealed they had since been unaware of opportunities to do so.

The survey of 2,003 UK investors showed overwhelming support for the introduction of a kitemark-style label to help them identify which financial products operate in a sustainable or ethical way. In total, 63 percent of the UK public backed the idea and 43 percent said it would make them more likely to buy a financial product, rising to 53 percent of 18- to 24-year-olds.

The poll also found a surprising lack of awareness of the £1.5 trillion sustainable investment market in the UK: In total**,** **54 percent of the GB public is unaware that ethical financial products exist, rising to over **63 percent among Millennials.

The survey was conducted by Triodos and Opinion Research for Good Money Week (30 Oct-5 Nov) – an annual UK campaign to raise awareness of ethical finance and investment options among individuals, financial advisers, pension funds and charities. Close to 50 activities are being held across England, Scotland, Wales and Northern Ireland as part of the Week. This year’s campaign features a fable that rather dramatically conveys the message, “Beware Strangers Bearing Gifts”:

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“The Good Money Week research throws down a very clear challenge to the sustainable investment sector: to step up on awareness and assurance,” said Simon Howard**, Chief Executive of** UKSIF, which coordinates Good Money Week. “Not enough people in the UK know ethical and sustainable options exist for their pensions and savings, and not enough are ready to buy without a mechanism such as a kitemark-style label to sort the wheat from the chaff. Creating and managing such a label would be no easy task, but is a job worth doing if it helps build trust and more sustainable capital markets.”

Headline findings from a YouGov Good Money Week poll of the British public show:

**Hear more on
engaging the
investor community
on sustainability

**at
New Metrics '16.****- 60 percent believe in the ability of the financial sector to generate high returns in an ethically and responsibly way.

  • 69 percent want a new law requiring financial advisors to ask customers if they’d like to exclude specific sectors or companies.
  • Almost one in four people (23 percent) are likely to invest 10 percent of their pension in impact investments
  • 35 percent would like their bank, pension or savings provider to offer a fossil-free option****, up from 32 percent last year. Demand is highest among Millennials – almost half (46 percent)****.
  • London has the strongest support for sustainable and ethical investment in the UK - 53 percent of Londoners want to make at least some positive difference with their money, compared to 45 percent nationally.

“While it is exciting that we are celebrating the ninth year of Good Money Week, the survey results show there is still a lack of awareness of the variety and depth of values-based investment solutions available,” said Amanda Young, Head of Responsible Investment at Standard Life Investments. “Our own research demonstrates that investors have, over time, moved away from wanting to avoid specific sectors to wanting to invest in companies that deliver a positive impact – increasingly, it is less about sectors and more about how companies behave and contribute to society.”

Transparency issues

“It’s clear that the UK public are interested in sustainability, and as an industry, we need to do more to help people understand where their savings are being invested,” said Steve Waygood, Chief Responsible Investment Officer at Aviva Investors. “In September, Aviva published a report entitled Money Talks – How Finance can Further the Sustainable Development Goals at the UN, calling for a kite-mark system to be introduced - a Fairtrade for Finance - so that fund managers can demonstrate their credentials as responsible investors.

“Voluntary standards in other industries are relatively commonplace, like Fairtrade in the retail sector, but there is no equivalent for the finance industry. We would like to be able to certify that our funds take sustainability seriously so that we can assure our clients that our investment approach is both long-term and responsible.”

Triodos says the poll points to a disconnect between companies becoming more sustainable and investors investing in these companies. Because of this, Triodos Bank is calling on the banking sector to report more effectively as to where they invest people’s money.

“We see a growing awareness amongst investors that their money has an impact on the world in which we live through how it is used by banks and funds,” Davies said. “We want to call on all banks and financial providers to be more transparent and open about where they invest people’s money, so that investors can make informed choices.

“Triodos Bank would very much welcome the introduction of a kitemark-style scheme to help people easily invest their money in ways that are good for people and the planet,” he added. “We hope that all the major players in the UK financial system will rally around an initiative like this to return greater transparency and trust to the sector.”

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