Making an impact

£22 billion could be invested in green and fair recovery, as pandemic fuels demand for impact investments

Katie Hill - Editor-in-Chief, My Green Pod

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Published: 17 October 2020

This Article was Written by: Katie Hill - My Green Pod

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The Covid-19 pandemic is driving the current growth in ethical investments, motivating one in five (22%) UK adults to explore ethical funds. The figure increases to 35% of under-35s.

Triodos Bank UK’s latest annual Impact Investing Survey has found that awareness of impact investing is significantly higher than in any other year since the survey began in 2016.

Only 14% of respondents in 2020 were not aware they could choose to invest their money in ethical funds; in 2019 over half (55%) of investors had not heard of impact funds.
 
While knowledge of and interest in impact investing is on the rise, over a fifth (22%) of Brits have saved more money during lockdown, and seen their ability to invest increase as a direct result of Covid-19.

Ethical investments and pandemics

If the 2.4 million Brits that currently hold adult Stocks and Shares ISA accounts switched to an impact investment fund, £22 billion per year could be channelled into businesses that are actively tackling and delivering measurable results in relation to the biggest global challenges we currently face.
 
The climate crisis and Covid-19 pandemic are key drivers in increasing demand for impact investment products. Over a third (39%) of Brits think ethical investments are the key to addressing the climate issues to avoid future pandemics.
 
Over half (52%) say that carefully selecting where you invest your money is one of the best ways to protect the planet and 49% would like their investment provider to be aligned with the UN Sustainable Development Goals.

This rises to 58% of people aged 18-34, demonstrating a desire from the younger generation for investments that benefit people and the planet.

‘It’s clear that many people want a green and fair recovery and are prepared to invest in making it a reality. The COVID-19 crisis has encouraged us to re-evaluate our consumer choices and appreciate the power behind where we invest or save, highlighting that impact investments make environmental, social and financial sense. Impact investors are a powerful force for change and  impact investments are helping to tackle the global challenges we’re all facing. We hope that as society recovers, more people choose to support companies that are prioritising the environment and behaving responsibly to help create a better future for all.’

GARETH GRIFFITHS
Head of retail banking at Triodos Bank UK

Banks’ lack of transparency

While the demand for impact investing is increasing, investors are being hampered by banks’ lack of transparency.

Only 7% of investors are satisfied with the level of knowledge and transparency about where their money is invested and almost half (49%) of investors say that investment providers aren’t helpful when it comes to revealing what their money is supporting.

Triodos is completely transparent about every investment made and that information is readily accessible.

‘I choose to invest with Triodos because, unlike other banks, it aligns with my values. Many of the mainstream investment fund managers offer one or two token ethical investments, whilst continuing with business as usual for the majority of their offers. I don’t want my money funding the fossil fuel industry or suppressing human rights, I would much rather deal with Triodos because I trust them to behave ethically throughout their whole business. Sometimes you can feel a bit hopeless and helpless with everything that is going on, but by putting my money with Triodos I am making a stand.’

HILARY JAYNE
Triodos impact funds investor

Triodos Bank offers two award-winning Impact Investment funds in the UK – the Triodos Pioneer Impact Fund and Triodos Global Equities Impact Fund – as well as a newly launched Triodos Sterling Bond Impact Fund.

Long-term performance of the funds shows an average annual return of 11.08% for the Triodos Global Equities Impact Fund and 12.98% return with the Triodos Pioneer Impact Fund over a five-year period.

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