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RBC Wealth Management Survey Shows Increasing Investor Interest in Responsible and Impact Investing

RBC Wealth Management Survey Shows Increasing Investor Interest in Responsible and Impact Investing

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Key findings around responsible investing and ESG themes point to terminology driving sentiment around purpose-driven investing

A recent survey conducted by RBC Wealth Management reveals more positive investor sentiment around responsible investing and evolving preferences toward impact investing.

When asked about responsible investing strategies, impact investing – defined as investing in assets to create a measurable positive social or environmental impact – is more attractive to respondents than in previous years, with 63% being interested in applying impact investing to their current portfolios versus 49% in 2023.

One key survey takeaway for financial advisors is the importance of positioning and using plain language when discussing investment choices. Respondents favor “responsible investing” far more than other terms (sustainable investing, impact investing and ESG investing), and the phrase has grown in popularity from the firm’s 2023 survey. “ESG investing” has rebounded some from its nadir of 11% last year, but still sits at 22% positive impression compared to 59% for “responsible investing.”

This year’s survey reflects what we’re seeing and hearing from our clients – words matter and have tremendous power. Investors want clear language, not jargon, when constructing their portfolios,” said Kent McClanahan, Head of Responsible Investing at RBC Wealth Management. “More than half of our clients are interested in responsible investing, so it’s important for advisors to be ready to talk about it to help clients make more informed investment decisions.

Seventy-five percent of respondents fall between ages 50-77. And while they skew slightly male (56%), the survey results point to a few areas of consensus among men and women.

  1. Both equally agree achieving financial goals is the most important factor when choosing investments.
  2. The vast majority (87%) agree investors should be able to consider ESG criteria without government limitations or restraints.
  3. Investment performance and transparency issues are their top two concerns as potential barriers to responsible investing.
  4. Nearly all are philanthropically active, with 86% overall taking part in direct giving and 57% volunteering their time.

However, there are three areas in which men and women differ:

  1. Of surveyed women, 62% are likely to discuss responsible investing with advisors within the next year, as opposed to 47% of men.
  2. Women are more likely to say they will only invest in traditional energy companies with plans to reduce greenhouse emissions and address climate concerns (59% women vs. 41% men).
  3. Water, health, education and affordable/clean energy are the most popular themes clients are interested in, driven by female respondents. Male respondents were more interested in investing in “industry, innovation and infrastructure,” which is fifth on this list.

Related Article: JPMorgan, Citi, RBC Reach Agreement with NYC on Climate Finance Disclosures

Clients want to know what their money is doing on topics that are important to them. They want to understand what their impact is and how that affects their returns,” McClanahan said. “And they want access to all information – including ESG data – to construct investment portfolios that reflect their values and financial objectives.

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