Women, ESG and Investing

Our research identifies today’s working women as lead decision-makers and money managers, conscientiously engaged in managing money for themselves and their families. It also highlights a keen interest in the way in which environmental, social and governance (ESG) issues impact on their lives and their finances.

Discussions about how integrating ESG considerations into the investment process can lead to better outcomes for people and our planet were met with positivity and enthusiasm. There was also much interest in how the United Nations Sustainable Development Goals can be aligned to investments. Women care about these matters and want to invest responsibly.

While the research highlights the low awareness of some of the terminology used by the investment community, it nonetheless reveals an appetite among women to know more about ways in which they can “invest well”.

‘Women care…and want to invest responsibly.’

This report provides a summary of the findings from qualitative research undertaken among women, and quantitative research among a nationally representative sample of almost 9,000 men and women in the UK. It is the first report from a much larger study and other findings will be published over the next few months. At Aberdeen Standard Investments, ESG considerations are embedded in our investment process, and have been for many years.

We are long term investors and that means knowing and understanding the environmental, social and governance factors affecting the prospects of the investments that we make on behalf of clients. Investors can be confident that we are working hard to enhance the value of their investments while contributing to a sustainable world. A good outcome for our environment and our society is consistent with a good outcome for our clients.

We are also committed to working with our clients and their advisers to ensure that investment decision-making is straightforward and removing complexity wherever possible, which was identified in this research as a key requirement.

There is more work to be done to make investing responsibly more widely understood and accessible. We look forward to building on relationships with our clients, the wider investment community and policymakers to hasten the pace towards meeting these goals.

 

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‘Women care…and want to invest responsibly.’
 

Research
methodology

Chapter 1

Qualitative

Focus groups

Groups were held in London (6 August), Manchester (7 August) and Edinburgh (10 August) among 18 women aged 25 – 67 years, working full time or part time, covering social grades B, C1 and C2. All held one or more of the following: company pension; personal pension; bank or building society savings account; cash ISA; stocks and shares ISA; other investment account.

All verbatims quoted in the research report are drawn from these three focus groups undertaken as the first phase of the research

Quantitative

YouGov Omnibus survey

YouGov ran four waves of the Omnibus survey among a nationally representative sample of 2,000 UK adults from 16 – 22 August.

The actual sample comprised: 8,958 UK adults. Of these, 4,346 were men and 4,612 were women (weighted bases). The basic analysis illustrates gender differences; deeper analysis by other variables (age, working status, investments held) is based on women. These bases are clearly indicated under each chart in the report.

Demographic context

Profile: all adult women

Base: UK adult women. N= 4612: YouGov

Marital status

Working status

Family status

Socio-Economic Group

Source: Gabriel Research & Management Ltd

The research was undertaken by Gabriel Research & Management Ltd on behalf of Aberdeen Standard Investments. The research programme comprised qualitative focus groups followed by a quantitative survey. Fieldwork took place from 6 – 22 August 2018

 

Summary of
research findings

Chapter 2

ESG and investing – to what extent do investors care?

The majority of investors certainly care where and how their money is invested, particularly women.

  • 36% of women (compared to 30% of men) assume that their provider is not investing their money in companies which are not appropriate, but “don’t know”. Nonetheless, there is a latent interest in ‘doing good’;
  • 24% of women compared to 20% of men like the idea that their investment choices could make a positive difference in the world.
  • Only 9% of women are not interested in where or how their money is invested.

The nine categories of ESG issues introduced to respondents: human rights, preserving the environment, good corporate governance, sustainability, avoidance of unethical products, ethical sourcing, innovation, community, and social impact, attracted a groundswell of support but human rights was top overall.

Generally, women care more than men about all of the ESG issues presented, attributing higher scores than men to each category as being important to them personally, particularly human rights. Good corporate governance matters most to men but is the third most important issue for women after human rights (first) and preserving the environment (second).

To what extent do respondents care where and how their money is invested

‘1 in 4 women like the idea that their investment choices could make a positive difference in the world.’

I would hope that my financial service provider is working to achieve the best possible outcome for me and I don't care where or how the money is invested

I would hope that my financial service provider is not investing my money in companies which I don't consider to be appropriate but I don't know

I take an interest in where my money is invested but haven't considered holding any ESG (i.e. ethical/ impact/ sociallyresponsible/sustainable/ values-based) investments

I take an interest in where my money is invested and like the idea that my investment choices could have a positive impact on the world (i.e. that I am being a responsible "global citizen")

Thinking about ESG (i.e. Environmental, Social and Governance) issues and investing (e.g. in your pension, ISA or other investment)...Overall, which ONE of the following best describes your view? Base: all UK adults with investments N= 4789 YouGov

Source: Gabriel Research & Management Ltd
 
‘1 in 4 women like the idea that their investment choices could make a positive difference in the world.’

Which ESG issues matter most?

‘Only 9% of women are not interested in where or how their money is invested.’
Environmental, Social and Governance (ESG) factors are used to assess how companies manage their global business operations. Investment providers increasingly take account of these global issues because research has shown that companies which have good ESG policies are more likely to perform better for savers/investors. On a scale of 1 to 10, where 1 is "Not at all" and 10 is "Very much", how much, if at all, would you say each of the following global issues matters to you personally? Base: all UK adults N= 8958: YouGov

Source: Gabriel Research & Managemen t Ltd

The 17 United Nations Sustainable Development Goals (UN SDGs) were also the subject of discussion among qualitative respondents, who found it hard to choose what they would prioritise as being most important to them. As one respondent said, “they’re all important”; and another, “no poverty, zero hunger and clean water – who shouldn’t have clean water in the world? Who shouldn’t eat?”.

Only 20% of respondents overall (19% of women, 21% of men) had heard of the UN SDGs before taking the survey, but once these had been introduced to the qualitative respondents, talking about ESG issues and the UN SDGs prompted women in the groups to want to know more about how and where money is invested.

Not all women in the qualitative phase of research felt sufficiently well informed about the companies/funds in which their pensions were invested or that they had been encouraged to get involved in making choices. Those who were aware spoke passionately about their motives for investing responsibly, in ways “which are morally, sustainably acceptable”. They did not want their investments “earning money at someone else’s peril…to harm anybody else or to harm the environment”.

Some women were critical of what they perceived to be a lack of progress as regards preserving the environment in recent years: “We were the generation that were told as children, ‘we’re destroying the environment, CFCs are bad, global warming is on its way’. It’s really depressing to get to nearly 40 years old and find out that actually, no one’s done a damn thing about it.”

‘Talking about ESG issues and the UN Sustainable Development Goals prompted women in the groups to want to know more about how and where money is invested.’

Ranking third in importance to women overall, good corporate governance was also described by some respondents as being expected – “a given” rather than a preferred requirement.

Looking at the views of women only (see below), the relative importance of ESG issues is constant across female demographics, a slight point of difference being that good corporate governance is relatively more important to women with investments (i.e. older women and those with pensions).

Which ESG issues matter most to women?

Top 3
Bottom 3

NB % aware of the UN sustainable development goals

Age range %
18-24 32
25-34 19
35-44 16
45-54 16
55-64 19
65-74 17
75+ 19
Source: Gabriel Research & Management Ltd

Environmental, Social and Governance (ESG) factors are used to assess how companies manage their global business operations. Investment providers increasingly take account of these global issues because research has shown that companies which have good ESG policies are more likely to perform better for savers/ investors. On a scale of 1 to 10, where 1 is “Not at all” and 10 is “Very much”, how much, if at all, would you say each of the following global issues matters to you personally? Base: all UK adult women N= 4612 YouGov.

 
‘Only 9% of women are not interested in where or how their money is invested.’

Terminology - a barrier to engagement?

Of the terms used to describe investments that take account of ESG issues ‘ethical’, ‘socially responsible’ and ‘sustainable’ were selected overall (by men and women) as the most appropriate, possibly because they are the most familiar, but a large percentage of respondents (37% of women and 28% of men) did not engage with this question.

The number of “don’t know” replies in the quantitative survey is indicative of just how unfamiliar this subject is to a mass consumer audience. Among qualitative respondents, ESG as an abbreviation was considered “positive” but “nebulous”.

‘Awareness of the UN SDGs is greatest among 18-24 year olds.’

Which terminology best describes global issues that matter most to respondents?

Thinking about the terms used to describe investments which take account of these global issues (i.e. good corporate governance, human rights, sustainability, preserving the environment, innovation, ethical sourcing, social impact, avoidance of unethical products, community). Which ONE of the following terms best describes the style of investing representing the global issues that matter most to you? Base: all UK adults N= 8958 YouGov

Source: Gabriel Research & Management Ltd
“Now that I know what ESG is, it’s definitely positive, but it’s nebulous. I don’t think it’s going to mean a lot of things to a lot of people. I think ethical is very specific to a person, whereas I think socially responsible probably covers the whole gamut of what ESG does.”

Top 5 ESG issues that matter most to women

Top 5 ESG issues that matter most to women Top 5 ESG issues that matter most to women Thinking about the terms used to describe investments which take account of these global issues (i.e. good corporate governance, human rights, sustainability, preserving the environment, innovation, ethical sourcing, social impact, avoidance of unethical products, community). Which ONE of the following terms best describes the style of investing representing the global issues that matter most to you? Base: all UK adult women N= 4612 YouGov

Source: Gabriel Research & Management Ltd

Although ‘ethical investing’ resonates best with the issues that matter most to women overall, older women relate more to ‘socially responsible’. ‘Sustainable investing’ is popular among the youngest (18-24s). It is significant that those who have already invested in ESG-based investments strongly support the term ‘ethical’, which probably reflects the predominant nomenclature of investment products in this sector.

Almost half of all women surveyed (48%) hold some form of investment (pension or standalone product); of these, 14% have chosen to hold an ESG-based investment (7% of all women surveyed).

Motivations for ESG investing

Socially aware and concerned about global issues, consumers nonetheless need a compelling reason to buy an ESG-based investment. Investment performance and cost are a priority (cited by 25% of women and 27% of men).

Qualitative respondents agreed: “If they were both the same, obviously I would pick the one that would support these kinds of principles”. This view was shared by all women in the groups; several were willing to accept a lower level of return in exchange for the reassurance of knowing their investments were socially and environmentally responsible.

Our research findings suggest that simple, easy-to-understand product information from a trusted source would encourage engagement. In addition to this, qualitative respondents believed financial services providers could do more to promote their ESG credentials and reported that they would be receptive to messaging from financial institutions that “show compassion and understanding”. They were especially positively inclined towards brands that support minority groups and demonstrate social responsibility: “There are huge chunks of society that have [particular] needs and they would prefer to invest their money in companies that support and embrace them.”

“Obviously, I want my money to earn some money for the future but I want it to be a socially acceptable investment. I don’t want it to be earning money at someone else’s peril. I’m very, very concerned about the environment, and how people are living, that my money’s not being used to harm anybody else, or to harm the environment.”

Marginally more women than men are inclined towards gaining a better understanding of ESG-based investments (23% compared to 21%).

Women’s commitment to doing what’s best for their own financial future and that of their families was very evident from our research, as one respondent said: “I see it as my job to make sure that I’m aware of what’s going on and how best to manage our finances.”

This same sense of responsibility extended to their attitude towards investing responsibly. 19% of women (compared to 16% of men) would be encouraged to consider an ESG investment if they had a better understanding of how their individual investment could make a positive difference in the world.

 
‘Awareness of the UN SDGs is greatest among 18-24 year olds.’

What would encourage respondents to consider an ESG investment?

‘1 in 5 women would be encouraged to invest if they had a better understanding of how it could make a positive difference to the world.‘
Which, if any, of the following would encourage you to consider an ESG investment? All UK adults with no ESG investment N= 8323 YouGov
 
‘1 in 5 women would be encouraged to invest if they had a better understanding of how it could make a positive difference to the world.‘
 

Conclusion
 

How we decide to invest today, shapes tomorrow’s world.

The research identifies a depth of emotion and strong views among women on the importance of ESG issues to our collective future, particularly human rights, the environment, and good corporate governance. As lead decision-makers on financial matters at home, women are uniquely positioned to help facilitate positive change and to influence the next generation. They recognise that how we decide to invest today, shapes tomorrow’s world.

The concept of ESG integration as a determinate of long-term investment performance is well understood among the institutional investment community but remains new to mainstream investors. The number of “don’t know” replies with respect to certain ESG-focused questions in the quantitative survey is indicative of just how unfamiliar this topic is to a mass consumer audience.

The women we surveyed were highly engaged but none of them had ever come across the abbreviation ESG before they took part in the research. Once certain concepts and terminology were introduced, they were enthusiastic about learning more, debating the issues among themselves and asking questions of the moderator. For all but a small minority of women who had chosen to invest according to their values, being part of the research group changed the way that they viewed their savings and investments. It prompted those who had no prior understanding of ESG issues to re-examine what holdings they had, in order to understand more about the companies and funds in which their money was invested, in most cases, by means of their pension contributions.

Aiming to help people make more informed financial decisions is an important priority and one way to do that is by sharing knowledge. This research highlights the need to raise awareness of the ESG-driven investment process, so that mainstream investors can readily understand the opportunities it offers them, their families and the world we share.



Image credits

Editorial image credit: ultramansk / iStock Images


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