The number of investors selecting alternative investment vehicles because of ethical and green credentials has been described as “incredibly promising” by Warrington-based investment provider Avacade Investments.
The company’s Alternative Investment Index (AII) found that 12% of investors stated that whether an alternative product was green or ethical was of significance importance. Only two other factors – financial returns and being able to access the money at any time – were more important.
The report said these responses underlined an “engaged and socially conscious investor”. Research has shown that sustainable investment does not have a detrimental impact on financial returns, and could improve returns, particularly over the long-term.
Research published in January found that companies with positive sustainability records were valued higher by investors. This was supported by a separate study, which linked sustainability initiatives to investment stability.
Avacade added that the index has discovered an “engaged, passionate investor” with more than one in five of those surveyed stating they would invest in an alternative solely because of a personal interest in the product. Some 11% of investors would use alternative products because the product is more exciting than traditional investments.
Lee Lummis, operations director at Avacade Investments, said, “We were fascinated to discover such a personally involved and engaged investor when looking at alternatives. The financial returns are obviously of significant interest, however just how many choosing an alternative because of its green credentials is incredibly promising.”
At the beginning of the year statistics from the Investment Management Association showed a 20% increase in the amount invested in ethical retail funds, raising the total to £7.417 billion.
The report concludes, “We are confident that investor interest in alternatives will grow, and with it, so will the attention to sustainability.”