Investors ‘Willing’ to Sacrifice Performance for ESG

More than half of US investors are willing to sacrifice investment returns in favor of ESG goals, according to a survey.

Online financial advice firm Betterment surveyed 1,000 US investors about their understanding and interest in ESG investments, and found that 58% were “willing”, “somewhat willing” or “very willing” to sacrifice performance from their investments in order to achieve ESG goals.

A further 26% said they were “not very willing”, while 16% were “not willing at all” to sacrifice performance.

Quoted in the report, Betterment’s senior vice president for product strategy and sustainable investing Boris Khentov said: “It is compelling to see so many respondents express convictions strong enough to factor into their investment choices. These findings also evidence some lagging awareness, as recent research continues to indicate that investors may not have to sacrifice performance when investing sustainably.”

Meanwhile, Betterment’s research also highlighted the sustainability profile of cryptocurrencies, as more individual investors become interested in this new asset class.

The reported stated that ‘mining’ activity related to Bitcoin uses an estimated 136 terawatt hours of electricity every year, meaning it has a direct impact on energy consumption and carbon emissions.

However, while 62% of respondents said they were aware of these concerns, Betterment found that ESG-aware investors were “significantly more aware” of sustainability issues relating to cryptocurrencies. At the same time, 80% of those already holding ESG-themed investments also held a cryptocurrency or other crypto-asset.

“While this strong correlation might seem counterintuitive, it could also follow that an ESG investor is more likely to engage with any relatively new trend in investing, whatever it might be,” Betterment’s report stated.

Despite record-breaking fund flows into ESG and impact investments, Betterment said ESG-themed investing was “still short of mass adoption”.