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Home Business NewsBusiness ESG investment market set to double in 2021

ESG investment market set to double in 2021

by LLB Editor
15th Mar 21 10:48 am

The environmental, social and governance-based investment market is set to double in 2021 as investors plan to move funds to support companies with a positive ESG rating or impact, a new report shows.

The study by OnePlanetCapital, a new sustainability driven investment house focused on climate change, revealed that a tenth of (9%) investors currently hold ESG investments. The market is set to double this year as over one in 10 (12%) investors who do not currently invest in ESG plan to move investments to ESG related funds in 2021.

Furthermore, an additional 17% of investors are planning to move to ESG in 2022 or later, showing the potential the market has to grow in the coming years. Even of those who do not plan on moving investments to ESG this year or next, two fifths (40%) are still considering moving them in the future, which is a higher proportion than those who are not considering moving them at all (30%).

ESG is now a key factor for investors when making decisions about their portfolio, with the research suggesting investors are becoming increasingly concerned about global environmental issues such as climate change.

Three quarters (75%) say investing in businesses that tackle climate change or have a positive impact on the environment is important to them. One in seven (70%) investors say they would avoid investing in a business with a negative societal, corporate governance or environmental impact, showing the influence a company’s ESG credentials can have on the value placed on them by investors.

Almost three in 10 (28%) investors would consider higher risk/higher return investments that tackled climate change over safer, more traditional stocks. This suggests that early stage investors who would traditionally focus on traditional funds would be interested in taking more of a risk in ESG related funds, such as Enterprise Investment Schemes (EIS), if it enabled them to invest in sustainable businesses and contribute to offsetting global issues such as climate change.

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