Advisers say green is the colour of concern

As the world follows the UN Climate Change Conference in Madrid, it’s useful to ask whether climate change might have an impact on financial savings. For the first time, the Schroders 2019 Annual UK Financial Adviser Survey asked financial advisers whether environmental, social or governance (ESG) considerations were taken into account when selecting funds, and how they saw environmental change, including climate change, affecting investment.

Investors, the survey showed, were aware of climate change, its geopolitical challenges and possible technological responses. Investors predicted that the coming decade would be dominated by disruption due to environmental change and governments’ responses to it, with 76% expecting the disruption to continue and increase. As a result, 66% of those surveyed expected market volatility to increase and 43% explicitly considered ESG factors when selecting funds.

According to Philip Middleton, Head of UK Intermediary at Schroders, ‘As concern has built in 2019 about the ongoing climate emergency, our survey suggests that awareness of ESG factors among investors is rising and is fuelling conversations with advisers.’

Advisers also reported on issues raised by their clients with 47% of advisers saying climate change was raised ‘fairly frequently’ or ‘most of the time’. When it came to the environmental impact of investments, 41% said that their clients raised the issue either ‘fairly frequently’ or ‘most of the time’.  Between 0-25% of clients specify that investments should take ESG factors into account when choosing funds.

Photo by Jace & Afsoon on Unsplash

Article is accurate at date of writing.