Sustainable investing: No longer an option but an expectation?
An Allianz Life survey finds Americans warming up to the idea of sustainable investing, and not just in the financial services industry.
Sustainable investing is here to stay. Nearly two-thirds of Americans hold a positive view of this type of investing, according to a recent survey by Allianz Life.
More than half of survey respondents who currently are not doing so expressed interest in allocating funds to sustainable investments. Those who already practice sustainable investing are putting nearly half of their total investment portfolio toward companies adhering to sustainability principles.
And 68 percent believe that reallocating investments away from companies not following sustainability principles is an effective way to punish or reward businesses for their actions.
“Sustainable investing leads to sustainable outcomes,” said Todd Hedtke, chief investment officer for Allianz Life. “Financial services and insurance companies are in a unique position and can play a critical role in the adoption of sustainable investing principles. Industry leaders have adopted a set of investing criteria that uses a sustainability lens for evaluating potential investments. It has a powerful domino effect toward bringing more companies in line with efforts to create a more sustainable future.”
This increased focus on the financial services and insurance industries also is leading to a new expectation: More than six in 10 Americans believe financial services companies have a responsibility to do whatever they can to mitigate the climate crisis, and 59 percent believe insurance companies have the same obligation.
Respondents also are drawing a clear line between sustainable investing and better outcomes. Sixty-two percent of Americans believe financial services companies that embrace environmental sustainability are better positioned for long-term success, with 58 percent feeling the same way about insurance carriers.
Diving even deeper, more than 63 percent said that if they were making a decision on which life insurance policy to choose, they would select the policy from the carrier that is committed to incorporating principles of sustainability into their investment decisions.
“Sustainable investing has moved from being an aspiration to an expectation,” Hedtke said.
“The firms that choose to ignore these principles will face increasing costs, rising negative sentiment among investors and, ironically, a less than sustainable future themselves.”