RI remains a growing interest but greenwashing is a big concern
The backlash against all things ESG including sustainable investing has always been mostly south of the border, with Canadian retail investors continuing to show an interest, and not just among younger investors.
A new report published today (April 10) reveals that 67% of retail investors who took part in a poll said they are interested in responsible investing (RI) and while this is highest among younger investors and women, over 55s are also showing increased interest.
Based on a survey of over 1000 investors over several days in January and February, the Responsible Investment Association’s new report reveals a desire among respondents to speak about RI with their financial advisor. So much so, that 76% want advisors and financial institutions to be required to ask questions related to responsible investment considerations as part of the Know Your Client process.
The survey found that only 28% of respondents had been asked questions like this by their advisor or FI. It also revealed that more than half of investors are concerned about greenwashing which is deterring them from responsible investing (RI), along with lack of knowledge about RI funds and strategies (66% know little or nothing about RI and 19% have not even heard of it), and performance concerns.
More than a third said they are more likely, given world events, to choose RI now than one year ago, while 49% are neither more or less likely to.
“The demand is there,” says Patricia Fletcher, CEO of the RIA. “However, the persistence of greenwashing as a deterrent signals that despite recent progress, continued efforts on multiple fronts are required to address these concerns. Advisors are uniquely positioned to engage with clients to address both their values and concerns and provide education.”
AI permeates almost everything these days and the survey also asked about its use in investment decision making with 64% of respondents saying they are not very familiar or not familiar at all with how it is used in this regard.
Seven in ten say it is important for companies in their investment portfolio to adopt responsible AI frameworks and principles, and a similar share says it is important for their financial advisor or FI to adopt responsible AI frameworks and principles.
