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
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.