Sustainable investing is top of mind with Americans despite the ongoing volatility of the past several years.
In fact, nearly two-thirds of respondents to a new Allianz Life study hold a positive opinion on the investing strategy, and they’re taking action. More than half of the survey respondents who are not currently participating expressed interest in allocating funds to sustainable investments.
The study also found that respondents already investing are putting nearly half of their total investment portfolio toward companies adhering to sustainability principles.
In addition, they are not afraid to use their investments to reward or punish companies for their sustainability practices—or lack thereof. More than two-thirds of Americans believe that reallocating investments away from companies not adhering to sustainability principles to those that do is an effective way to punish or reward companies for their actions.
Focus on financial services
Findings from the study also indicate an increased focus by Americans on the role that financial services companies and insurance carriers play in sustainable investing.
Nearly two-thirds of respondents agreed that a financial services company can have a significant impact on environmental sustainability efforts, and that, collectively, a commitment in the financial services industry to environmental sustainability could make a positive difference.
They held similar beliefs about the role insurance companies can play in supporting these efforts. More than 61% indicated that an insurance company can have a significant impact on environmental sustainability efforts and that if the insurance industry committed to these efforts it would make a positive difference.
Interestingly, respondents also are drawing a clear line between sustainable investing and better outcomes. Sixty-two percent of Americans believe that financial services companies that embrace environmental sustainability are better positioned for long-term success, with 58% feeling the same way about insurance carriers.
Diving deeper, more than 63% said that if they were deciding on which life insurance policy to choose, they would choose the policy from the carrier that is committed to incorporating principles of sustainability into their investment decisions.
With these increased expectations comes a need for greater awareness of the investing process.
Only 52% of people understand how financial services companies make decisions about how to invest their money, and fewer (38%) are aware of specific financial services companies that successfully invest their assets in environmental sustainability efforts. Fewer understand how insurance companies make investment decisions (46%) and know any insurance companies successfully investing in environmentally responsible ways (31%).
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.