ESG: A megatrend here to stay
New research suggests environmental, social and governance (ESG) investing is set to continue gaining prominence, with ESG issues increasingly converging into mainstream investment strategies.
A growing trend
The last few years have seen a substantial rise in ESG investing around the globe, driven by an increasing desire for investors to know both where their money is going and that it is having a positive impact. According to a survey conducted by CoreData, three-quarters of UK professional fund buyers now expect all investment funds to incorporate ESG factors within their strategies during the next five years.
Pandemic has raised awareness
Another finding suggests the pandemic has accelerated this momentum, with eight out of ten UK fund investors saying they increased their focus on ESG in the wake of COVID-19.
Commenting on the survey, founder and principal of CoreData, Andrew Inwood, said, “The pandemic has helped reset humanity’s moral compass and encouraged people to favour investments aligned with their beliefs and values.”
COP26 to generate interest
Research3 has shown that environmental issues top the list of ESG concerns, particularly pollution and waste, and climate change. The trend towards ESG investing is therefore expected to receive a further boost in the run-up to the 26th UN Climate Change Conference of the Parties (COP26) which the UK is hosting in Glasgow this November.
The election of President Biden and his commitment to an ambitious new climate regime can also be expected to raise the profile of both COP26 and climate change issues in general. And this, in turn, will bring ESG investing into even sharper focus during 2021.
It is important to take professional advice before making any decision relating to your personal finances. Information within this newsletter is based on our current understanding of taxation and can be subject to change in future. It does not provide individual tailored investment advice and is for guidance only. Some rules may vary in different parts of the UK; please ask for details. We cannot assume legal liability for any errors or omissions it might contain. Levels and bases of, and reliefs from, taxation are those currently applying or proposed and are subject to change; their value depends on the individual circumstances of the investor.
The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated. If you withdraw from an investment in the early years, you may not get back the full amount you invested. Changes in the rates of exchange may have an adverse effect on the value or price of an investment in sterling terms if it is denominated in a foreign currency. Taxation depends on individual circumstances as well as tax law and HMRC practice which can change.
The information contained within this newsletter is for information only purposes and does not constitute financial advice. The purpose of this newsletter is to provide technical and general guidance and should not be interpreted as a personal recommendation or advice.
The Financial Conduct Authority does not regulate advice on deposit accounts and some forms of tax advice.