Nuveen reports that while performance continues to "take the front seat" on most investment decisions, some investors do see making a positive impact on society as a high priority.
Amy O'Brien, global head of responsible investing at Nuveen, said in a statement that the "recent social unrest" and the COVID-19 pandemic have emphasized the aspiration to make a difference.
"Investing with a responsible approach has become a preferred method to concretely address important issues, such as social justice, climate change and fairness in the workplace," O'Brien said in the statement. "Investors increasingly understand that promoting positive outcomes on important ESG issues, not only minimizes portfolio risks, it actually leads to improved performance overall."
Nuveen's "responsible investing" study surveyed hundreds of financial advisors and more than 1,000 investors of high net worth, according to a news release. For investors, the survey said 85 percent of them agreed they would only "invest responsibly" if the returns are matching or better.
"A majority of investors (53%) cited better performance for prompting them to choose responsible investments, moving past the misconception that investing responsibly means sacrificing returns," according to the release.
Seventy percent of surveyed advisors said "superior risk management" and better performance were the main factors that pushed clients of high net worth to invest in responsible investing, according to the company. That figure is up from 39 percent in 2018, according to Nuveen.
"Just as investors have come around to the performance benefits of RI, so too have advisors, as nearly one third (32%) report that their clients' portfolios with RI achieved above market-rate returns in the past year," according to the news release.
About half of the investors of high net worth reported that recent natural disasters have caused them to be more interested in responsible investing, according to the survey.
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Ryan Tarinelli
Ryan Tarinelli is a reporter at the New York Law Journal. He is based at the New York State Capitol in Albany, New York. He can be reached through email at [email protected]. Follow him on Twitter: @ryantarinelli.
