New research by Triodos Bank has found that the UK market for socially responsible investments (SRI) has reached a tipping point of growth.
In its annual Impact Investing survey, it says SRI is set to increase by 173% and will be worth £48bn by 2027 – driven by a new socially conscious group of younger investors, 47% of whom say they are planning an ethical investment.
This growth could present an opportunity to co-ops working in sectors such as health and renewable energy. Triodos lends to several co-ops, including Rockdove Rising Housing Co-op in Manchester, Westminster Housing Co-op in London, and renewable energy co-op Awel in Swansea.
The research also points to a trend of ‘resist investing’, particularly among millennial investors. This group is actively seeking out ethical opportunities to counteract ‘bad news’ such as climate change, financial unrest and fossil fuels.
Other key findings include:
- More than half (55%) of investors would like their money to support companies that contribute to society and the environment.
- 61% of investors believe that for the economy to succeed in the long-term, investors need to support progressive businesses.
- But 73% of UK investors have never been offered ethical investment opportunities.
- More than two thirds (69%) of investors would like to have more knowledge and transparency about where their money goes.
- Millennials are driving a new ‘resist investing’ trend, with more than half (56%) investing in an ethical fund as a result of something bad happening in the news.
Bevis Watts, managing director of Triodos Bank UK, said: “Demographic changes, social media and awareness of the challenges facing our planet mean that investors are waking up to the fact that there really is no such thing as a neutral investment. Every investment has an impact on individuals, society and the economy.”
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He added: “The SRI market is growing quickly but we must be careful that it isn’t just labelled as sustainable investment on the surface. Otherwise it might come down to just doing things slightly less badly. A best-in-class investment in the tobacco or arms sector is not going to help make our society more sustainable.
“We encourage all investors to seek out funds that are not only best-in-class, but that apply strict sustainability criteria. Triodos is supporting a government taskforce examining issues like product standards and transparent reporting.”
