The positive societal and environmental impacts of sustainable funds are nice, but American investors are attracted by the promise of higher returns, according to the annual Schroders Global Investor Study released Wednesday.
In April, Schroders surveyed more than 23,000 investors globally, including 2,000 in the U.S., to gauge views on sustainable investing, and found 55% of Americans were more likely to invest in sustainable funds for their more attractive return profile.
The survey also found that globally, only 4% of investors avoided sustainable funds due to perceived inferior returns, down from 28% in the 2018 survey.
Sarah Bratton Hughes, head of sustainability, North America for Schroders, said during a press briefing call that 2020 marked a turning point for interest in sustainable investing across generations.
"While we have long-believed that systematically integrating sustainable investment principles into our investment process will lead to better long-term risk-adjusted returns, 2020 has proven a turning point that the evidence is increasingly clear that investing sustainably could lead to better long-term outcomes," Ms. Bratton Hughes said.
On a scale of 1 to 10, with 10 being extremely important, the two key factors that ranked the highest for American investors surveyed were social responsibility at 7.69 and employee treatment at 7.63.