Head versus heart: The six types of sustainable investor
Are you a 'moderate green' or an 'eco warrior'?
UK investors can be divided into six core groups of consumers from those who are willing to prioritise sustainability above financial returns, to those who prioritise performance above all else, according to The Great British Sustainable Savers Census, conducted by Boring Money and sponsored by Aberdeen Standard Investments.
The survey detailed two primary categories into which the six core groups can be placed, with those who choose investments that "reflect their sustainable values and lifestyle" in the 'heart' category, and those whose investments are "positioned to perform well" comprising the 'head' category.
Canvassing over 6,000 UK investors, the research found that while most people invest with the primary drive of achieving higher returns compared to cash savings, 25% of existing investors believe it is more important for an investment to reflect their sustainable values than purely deliver returns.
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The largest proportion of investors fell under the banner of 'moderate greens', for whom returns are a priority, but want to see their money have a positive impact, with a particular focus on protecting the environment.
At the 'heart' end of the scale are 'eco warriors', who prioritise sustainability over returns and want to see their money be a "force for change".
They invest in a way that protects the environment and are the youngest of the six segments, with 78% under the age of 55.
Also willing to prioritise sustainability over returns are the 'future focus' cohort, who are interested in a broader range of ESG issues than just environment and are driven by a desire to "create a better world" for their families.
Alongside the 'moderate greens' in the 'head' category are the 'diligent savers', who prioritise performance but want to see good governance in their investments and companies "doing better", and the 'no nasties', who do not want to be invested in sin stocks such as tobacco and arms.
At the opposite end of the scale to the 'eco warriors' are the 'pure returns' investors who are "only interested in investing for returns" - this is the oldest of the six segments and most male dominated.
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Holly Mackay, CEO of Boring Money, said investors, advisers and "even fund managers are confused".
"The industry argues about semantics and naming; characteristics and false claims. As always the focus is on product sets not customer need or demand," she said.
"We surveyed over 6,000 UK adults to understand the nuances of what they wanted. We looked at priorities from financial returns to more holistic attributes. We asked about environmental, social and governance concerns to understand thematic preferences.
"And from this we identified six key 'tribes'. If we start our proposition development with what the customer wants, and then move along to products, rather than the other way round, we will surely deliver better outcomes."
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