Global survey finds investors spurning ESG

Yasmine Raso

Senior Journalist, Financial Newswire

4 October 2022

A new survey conducted by Capital.com on close to 2,000 of its global clients has revealed more retail investors are starting to shun environmental, social and governance (ESG)-focused factors when considering their investments and portfolios.

The poll found 52 per cent of “do-it-yourself (DIY)” traders and investors who responded have never chosen a stock based on any ESG criteria, with 46 per cent of them saying they were uncertain of how to do so and 12 per cent thought them too expensive.

“The findings of our survey show a lack of awareness and information around sustainable investing,” Kypros Zoumidou, Chief Commercial Officer at Capital.com, said.

“This information gap has clearly impacted the adoption of ESG among DIY investors, which is compounded further by a perception that sustainable investments come at a premium.

“By making ESG data more widely available to all investor groups, including self-directed retail investors and traders, we can level the playing field and empower more people to make sustainable choices.”

They survey also showed that just over half of respondents (53 per cent) make investment decisions based on profitability over social or environmental impact, while only seven per cent said this was their primary reason.

Forty per cent of respondents said both profit and social or environmental impact were both key criteria considered when making investment decisions.

“ESG factors can be useful additional analysis when making a decision to buy a certain stock. How a company manages its exposure to climate change or human rights, for example, could have a significant impact on its stock’s performance,” Zoumidou said.

“A company well-equipped to face ESG issues is more likely to be resilient over the long term and therefore more sustainable.”