But there are still three big barriers that put some people off
Two-thirds of financial advisers are investing more of their clients’ money in dedicated ESG fund propositions compared to this time last year, according to research from FE fundinfo.
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And the driving force behind the change seems to be coming from the clients.
Last year, interest in ESG strategies came from a combination of investor demand and institutional sales pressure.
This year, however, 73% of advisers report that their clients are more interested in ESG investing compared with 2020.
And the rising demand shows little indication of slowing, with 76% of advisers believing that their clients will have more than a quarter of their portfolios invested in environmental, social and governance strategies within the next five years.
Two-thirds of advisers invest client money in ESG - FE fundinfo
Just 1% not investing ethically
Of the advisers who already offer ESG advice to their clients, 26% say their propositions have been built and just slightly below that (24%) outsource their ESG function to investment specialists.
More than two-thirds (73%) of advisers are investing clients’ money in ESG fund propositions, research conducted by FE fundinfo has found.
The research showed the surge of interest in ESG is largely being driven by investors themselves. In the firm s research from 2020, advisers generally believed early interest in ESG investment solutions.
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UK managers face ‘significant’ SFDR compliance costs
Brexit-led divergence means that UK fund managers are likely to face steeper compliance costs than their EU rivals from the EU’s Sustainable Finance Disclosure regulation (SFDR) which came into effect today.
The regulation is a key plank of the EU’s green finance action plan and has been welcomed as a useful step in bringing more transparency to ESG funds but it has also caused concern about the cost of compliance.
A report from Bloomberg Intelligence (BI) suggests that UK-based firms face more significant challenges than firms in mainland Europe because of a difference in rules.