Return on values

Most sustainable investors expect better performance, bigger impact

19 Sep 2018

Key takeaways

  • US sustainable investors are the most committed, with adopters dedicating nearly half of their portfolios to sustainable investments—15% more than globally.
  • They don’t expect to sacrifice returns.
  • Sustainable investing is expected to be mainstream by 2023.

Every day, wealthy investors make spending, philanthropic and even career decisions to help make the world a better place.

But when it comes to investing, few investors act with the same sense of purpose—yet.

For UBS Investor Watch: “Return on values,” we surveyed more than 5,300 investors in 10 markets on sustainable investing. We found that, while some investors understand the basic concept, confusion about sustainable investing terms, its various approaches and even its impact, is widespread. For example, investors make little distinction among the three major sustainable investment approaches: exclusion, integration and impact investing (to make this easier, we included a glossary below).

Better education often leads to higher adoption. Sustainable investors, for example, are influenced by multiple sources, including professional Advisors, family, friends and media. Nine in 10 cite an advisor’s impact on their decision to invest sustainably.

Adoption of sustainable investing varies dramatically across countries. For example, the emerging markets of China and Brazil indicate they have the highest rates of adoption, while only 12% of US investors have any sustainable investments.*

Few investors expect to sacrifice returns when investing sustainably. In fact, 82% believe the returns of sustainable investments will match or surpass those of traditional investments. Investors view sustainable companies as responsible, well-managed and forward-thinking—thus, good investments.

If investors prove to be right, more companies will likely adopt sustainable practices. Perhaps then, the world will be a better place indeed.

Glossary

  • Sustainable investing: integrates societal concerns, personal values or an institutional mission into investment decisions
  • Exclusion: excludes companies or industries from portfolios where they are not aligned with an investor’s values
  • Integration: integrates environmental, social and corporate governance (ESG) factors into traditional investment processes, seeking to improve portfolio risk and return
  • Impact investing: invests with the intention to generate measurable environmental and social (E&S) impact alongside a financial return

Is your portfolio having the impact you want? Connect with your UBS Financial Advisor or find one.

Disclosures