South Africans’ adoption of sustainable behaviour yet to impact investing

THE 2017 Schroders Global Investor Study has found that South Africa ranks among the top 10 countries in terms of investors’ knowledge, attitude and behaviour regarding sustainable behaviours and investing.

The study is a survey conducted by global asset management firm Schroders of over 22 000 wealth investors across 30 countries.

Jessica Ground, the global head of stewardship at Schroders, says that, in unpacking the components that contributed to the score, it was found that South African investors scored particularly well in terms of the adoption of sustainable behaviours, such as recycling and reducing energy, which showed they were ahead of the curve in terms of their personal contribution to creating a more sustainable society.

Many investors, however, are not yet allocating wealth to sustainable investment funds.

When asked how often they personally contribute to a more sustainable society, sustainable investing was near the bottom of the sustainable behaviour list, with only 52% of respondents saying they often invest in sustainable funds rather than those that don’t consider sustainability factors, compared with 68% who often reduce or recycle their household waste and 69% who often buy products from businesses with good records of social responsibility.

This propensity for sustainable behaviour among investors does, however, bode well for the future of sustainable investment in South Africa, Ground says.

“We know from the global study that there is a positive correlation between countries that exhibit more sustainable behaviours and those that are also more likely to invest in sustainable funds.

“Furthermore, there does appear to be an upward trend in the local sustainable investment space, with 89% of South African investors saying that sustainable investing is more important to them now than it was five years ago, and over threequarters (77%) confirming that they have increased their investment in sustainable funds, compared to five years ago,” she adds.

Ground says this is in line with the global trend. “Globally, sustainable investing is growing in importance to investors, with 78% of investors stating it is more important to them now than it was five years ago. Moreover, global investors are increasing the share of money they are allocating to sustainable investments – 64% of investors said they have increased their investment in sustainable funds over the past five years.”

One thing that Ground says is necessary to persuade more South Africans to increase their allocation to sustainable investment funds is education.

“Another interesting finding from the study was that sustainable investing was among the investment themes that South African wealth investors would most like to improve their knowledge of.

“We already know that South Africans are changing their behaviours, gradually incorporating more sustainable practices into their everyday lives. So with the right education and better communication on how sustainable investing works, it is only a matter of time before we see a noticeable uptick in the area.”