New UBS Investor Watch Study Reveals Stark Differences in Adoption of Sustainable Investing Globally
NEW YORK--(BUSINESS WIRE)--Sep 19, 2018--UBS today launched “Return on values,” the latest edition of its UBS Investor Watch report. UBSInvestor Watch is the world’s largest recurring global study of High Net Worth Investors (HNWIs).*
The study reveals stark differences in the sustainable investing landscape. The US has the lowest rate of adoption at 12%, compared to 39% of investors globally. China, Brazil and the UAE lead the charge, with 60%, 53% and 53% of investors respectively indicating they have sustainable investment holdings.
However, despite lower adoption, sustainable investors in the US have the highest average allocation, with 49% of their portfolio assets dedicated to sustainable investments. The average global allocation is 36%.
“Investors see sustainable investing as the way of the future. Across all ages, wealth levels and regions, many believe sustainable investing will become a more mainstream approach over time,” said Paula Polito, Global Client Strategy Officer, UBS Global Wealth Management. “Many of the investors surveyed believe that sustainable investments are wise investments and see no need to compromise their personal values for financial returns.”
Young investors and those with the greatest wealth lead momentum behind sustainable investing
While adoption today is low in the US, investors expect sustainable investing to grow to 19% over the next five years, an increase of 58% from today’s levels. In fact, almost a third (32%) of US investors expect sustainable investing to become the “new normal” in 10 years.
Younger investors and those with the greatest wealth are the leading adopters of sustainable investing, both globally and in the US. Seven in ten (72%) young American investors 1 invest sustainably, compared to only 6% of investors age 65+. Among the ultra-rich, 2 40% invest sustainably, compared to 8% of investors with $1 million to $2 million of investable assets.
Confusion and comfort with their investment approach holds investors back
The study finds that among non-adopters in the US, 85% are happy with their existing investment approach, followed by 79% who say that quantifying the impact of sustainable investments is a major barrier.
Confusion about terminology is compounding the issue. Two-thirds of US investors (66%) find the language of sustainable investing perplexing, and less than a quarter (23%) are very familiar with the term itself. Similarly, US investors make little distinction among the three major sustainable investment approaches: exclusion, integration and impact investing.
In the midst of this confusion, it is clear that advisors have an important role to play, with sustainable investors listing their financial advisors as the top influencers in their decision to invest sustainably, followed by family and friends.
“The opportunity for growth in the US is vast, with young people and wealthy investors leading the way and momentum growing,” said Andrew Lee, Americas, Head of Sustainable and Impact Investing at UBS Global Wealth Management’s Chief Investment Office. “Increasing education on the benefits and establishing common conventions for describing and measuring impact will help sustainable investing become the new normal.”
No tradeoff between personal values and returns
The study shows that few investors expect to sacrifice returns when investing sustainably. In fact, 70% of US investors believe the returns from sustainable investments will match or surpass those from traditional investments. They view sustainable companies as more responsible, better managed and more forward-thinking—thus, good investments.
To encourage further adoption of sustainable investing, UBS has committed to raise at least $5bn in impact investments over five years, in support of the UN Sustainable Development Goals. At Davos 2018, UBS announced the first 100% sustainable cross-asset portfolios for private clients, targeting market rates of risk-adjusted return as well as positive social and environmental outcomes.
Notes to Editors:
About the research
* The cited research was conducted among more than 5,300 millionaires with at least $1 million in investable assets (excluding property). The global sample was split across 10 markets: Brazil, China, Germany, Hong Kong, Italy, Singapore, Switzerland, UAE, the UK and the US. The research was conducted between June 2018 and August 2018.
UBS provides financial advice and solutions to wealthy, institutional and corporate clients worldwide, as well as private clients in Switzerland. UBS’ strategy is centered on our leading global wealth management business and our premier universal bank in Switzerland, enhanced by Asset Management and the Investment Bank. The bank focuses on businesses that have a strong competitive position in their targeted markets, are capital efficient, and have an attractive long-term structural growth or profitability outlook.
UBS is present in all major financial centers worldwide. It has offices in 52 countries, with about 34% of its employees working in the Americas, 34% in Switzerland, 18% in the rest of Europe, the Middle East and Africa and 14% in Asia Pacific. UBS Group AG employs approximately 61,000 people around the world. Its shares are listed on the SIX Swiss Exchange and the New York Stock Exchange (NYSE).
About UBS Global Wealth Management
As the world’s largest wealth manager, UBS Global Wealth Management provides comprehensive advice, solutions and services to wealthy families and individuals around the world. Clients who work with UBS benefit from a fully integrated set of wealth management capabilities and expertise, including wealth planning, investment management, capital markets, banking, lending and institutional and corporate financial advice.
View source version on businesswire.com:https://www.businesswire.com/news/home/20180919005118/en/
Media Relations, UBS Global Wealth Management, Americas
212-713-3130 / 917-615-7094
KEYWORD: UNITED STATES NORTH AMERICA NEW YORK
INDUSTRY KEYWORD: PROFESSIONAL SERVICES BANKING CONSULTING FINANCE
Copyright Business Wire 2018.
PUB: 09/19/2018 08:00 AM/DISC: 09/19/2018 08:01 AM