Standard Chartered’s latest survey into the sustainable investing trends among the emerging affluent, affluent and high net worth investors revealed that sustainable investing is at a tipping point, with awareness and interest at an all-time high. However, investor apprehensions – lack of measurement and transparency – are preventing sustainable investing from becoming more mainstream.
The Sustainable Investing Review 2021 revealed an upward trend in sustainable investing among more than 2,000 investors, representing, surveyed in Mainland China, Hong Kong, Taiwan, Singapore, India, the UAE and UK. Overall, the allocation of sustainable investments in investor portfolios is on the rise: 13 per cent of investors already have more than 25 per cent of total investments channelled into sustainable solutions, compared to just 2 per cent of investors in 2020.
In India, the research identified trends across a four-stage adoption cycle:
- Awareness – 83 per cent know what suitable investing is
- Interest – 85 per cent show interest in sustainable investing
- Intention – 57 per cent of those who have not yet invested in sustainable solutions plan to in the future
- Adoption – 68 per cent have placed funds in a sustainable investment solution
Crossing the tipping point
India is on an upward trajectory when it comes to awareness on sustainable investing, with interest higher than the global average of 82 per cent. Its adoption rate of 68 per cent is also higher than the global average of 61 per cent. The potential to grow sustainable investing in India is significant: 67 per cent of Indian investors would take greater financial risks to gain social benefits, compared to 53 per cent of investors overall.
We uncovered a range of apprehensions potentially holding back investors in India, and found that most of them would want more access to sustainable investment options:
- Availability of suitable solutions: 62 per cent of respondents in India feel there is limited availability of sustainable investment options, compared to 51 per cent globally
- Transparency of the impact of sustainable investing: 72 per cent of India’s investors preferring investments with a story about the impact, compared to 58 per cent overall
- Financial performance: 58 per cent have concerns about the financial performance of sustainable investments (this is higher than the global average of 47 per cent)
Accelerating sustainable investment in India may simply be about meeting the demand for a wider range of solutions.
Samrat Khosla, MD & Head of Wealth, India, Standard Chartered, said: “The 2021 Review confirms the growing preference for sustainable investing among clients in India. The results also indicate a perceived gap in the availability of suitable sustainable investment options, implying that there is an opportunity for the industry to scale up offerings in this area and drive adoption and uptake. Sustainable investing is a win-win for everyone where investors can not only aim to generate returns but also channel the flow of money into companies that work to drive achievement on the sustainable development goals. At Standard Chartered, we are committed to partnering our clients and helping them drive impact through their investments.”
Standard Chartered is working through the financial system to address the issues with globalisation and enable a more inclusive and sustainable world economy.