Green and ethical retail investments have reached £23.5bn in the UK, estimates suggest
EIRIS Foundation reports strong growth in green UK investment, as separate survey suggests many Brits remain unaware of how their pensions are invested
Investment in UK green and ethical funds has surged to just over £23.5bn this year, showing a significant jump of more than £4.5bn from 2018 levels, according to new figures compiled by the EIRIS Foundation.
The charity’s latest estimates, which cover funds under the management of UK-domiciled green or ethical retail funds, demonstrate strong growth in demand for new investment products which take environmental and social issues into account, with total investments up from £19bn last year.
Peter Webster, CEO of the EIRIS Foundation, said growing awareness of the need for climate action had contributed to the rise in green investments over the past year.
“Retail investors are looking to extend their conscious purchasing decisions to their finances and we’ve seen some innovative new product launches aimed at meeting this demand,” he said. “We look forward to even stronger growth in the future as we work with others to build a more sustainable economy.”
The estimates were released yesterday by the charity, which aims to boost responsible investment in the UK, as part of Good Money Week, a national campaign running from 5-11 October led by the UK Sustainable Investment and Finance Association (UKSIF).
The update comes alongside the results of a new survey today which found more than half of British people do not know where their pensions are being invested, nor realise that their nest egg could be helping to fund fossil fuels or other companies that exacerbate climate change.
Carried out to mark the start of Good Money Week, the poll of 2,000 people found 53 per cent of British people do not know where their pension is being invested, and a similar amount – 52 per cent – do not realise that where their pension is invested can have an impact on climate change.
Only 12.6 per cent of survey respondents said they had asked their pension provider where investments were being held, and almost 57 per cent said they were unlikely to ask their employer how ethically or sustainably their pensions are invested, according to Good Money Week.
Yet at the same time, more than 47 per cent said they wanted their pension investments to match up with their personal values, the survey found. And, more specifically, almost 36 per cent expressed interest in how their pension funds could help to tackle climate change, and nearly 48 per cent said they would like their pensions to help finance green energy.
Moreover, poll 96 per cent of respondents said they would never consciously make a decision to invest their pension in fast fashion companies, which have faced fierce criticism for their resource intensive business models.
Charlene Cranny, campaigns director at Good Money Week, said the survey showed British workers were largely unaware of where their pensions were invested. Yet she warned many of the UK’s largest firms had workplace pension schemes which are likely to hold investments in oil, gambling, arms, and other controversial sectors, and therefore urged savers to consider switching their pensions.
“If company bosses and individual savers tell their pension provider these issues matter, huge amounts of pension savers’ money can instead be used to support more sustainable companies which benefit people and our planet,” she said. “Our pensions are another important lifestyle choice that can have a huge impact.”
“Quite frankly, there’s not much point in having a nice full pension pot if there’s no planet left to spend it on,” she added. “Plus, there is increasing evidence that funds which actively consider environmental, social and governance risks, and take action to manage them, often produce better returns than those which don’t.”