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Sustainability matters How important are environmental, social and governance (ESG) considerations to European retail investors? This question was at the heart of the survey that Nordea Asset Management (NAM) carried out over the summer. The result is clear: sustainability is at the top of investors’ agenda, and financial advisers have an important role to play in this context.
NAM gathered the views of 1,200 individual in- vestors in five European markets (Germany, Spain, Italy, France and Switzerland), asking them about their sustainability-related goals and what they expect of their advisers in that area. The results of the survey show that almost all European investors (89%) acknowledge sustainability as a key issue for society. They are aware of the impact that sus- tainability issues can have on their portfolios and, equally important, more than three-quarters believe their investment decisions can make a difference in creating a more sustainable society. The desire of creating a positive social and environmental impact is the main driver for investing in ESG solutions. The ambition of achieving higher returns comes only in third place.1 The majority of European investors cur- rently invested in ESG have increased allocations to ESG solutions over the last 12 months and 71% plan to do so within the coming 12 months. In line with these findings, 78% say ESG will continue to play an important role in their portfolios. When it comes to sustainability issues, the major- ity of surveyed investors think of the environment first. 63% of respondents point to global warming as the most alarming sustainability-related risk. On the flip side, climate change is also considered the most attractive investment opportunity in the next five years. Among younger investors, the social dimension of ESG is increasingly coming to the fore. Generation Z respondents, i.e. investors aged 18-24, view “S” investing as the next mega trend. Financial advisers have a key role When it comes to ESG, advisers have a crucial role as investors consider them the most important
The sustainability of their investment is important to retail investors in Europe. From their financial advisers, they expect guidance through the jungle of ESG approaches and terminology.
source of ESG information. “The coming years will bring increased demands for ESG investing, and investors will need even more guidance in their choices,” says Christophe Girondel, Global Head of Institutional and Wholesale Distribution at NAM. Thus, advisers need to step up their game. When the changes to MiFID II come into force in 2022, meeting regulatory mandates will require a robust knowledge of regulations and ESG, as well as a broad range of available MiFID-eligible products. “The investor shift towards sustainable solutions represents a massive opportunity for advisers who are early in recalibrating their business models to meet regulatory requirements and investor preferences,” Girondel continues. “At NAM, we are committed to making this transition easier by shar- ing our knowledge. We want to be advisers’ ESG partner of choice.”
1 There can be no warranty that an investment objective, targeted returns and results of an investment structure is achieved. The value of your investment can go up and down, and you could lose some or all of your invested money.
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