UNDERSTANDING COMPANIES’ SUSTAINABLE INVESTMENT PLANS: A DEEPER LOOK AT INVESTORS’ MINDSETS AND VALUES
Experts found that most investors engage with companies that share their values.
Common grounds are essential things for keeping a healthy relationship with fellow individuals. If we think that this only applies to personal relationships, we might need to rethink our position about the subject.
In fact, it also applies to business relationships between companies and investors. A Wells Fargo/Gallup Investor and Retirement Optimism Index survey shows that companies’ core values play a crucial part when it comes to people placing smart investments in their stocks.
According to the survey, three out of four American investors are not well-versed with sustainable investing or they heard little to nothing about the topic. One of the biggest reasons why they were not aware of the concept is because most financial professionals never discussed it with them. The other part suggests that they heard about it with their own effort and by doing their own research.
After discussing what sustainable investing means, most of the participants showed their enthusiastic side and want to learn more about it, with the notion that it will be a better investment in the future. Aside from that, around 71% of the participants say they will likely deal or buy stocks in companies sharing their values and beliefs.
Because of the growing interest in sustainable investing, we might see a huge surge and changes in the overall investment landscape in the coming future. However, many investors are still in the dark. Around 25% of investors that took the survey said that they got substantial details about sustainable investing funds while 38% shows little to nothing. About 12% of them heard sustainable investing from their fund manager. What’s more shocking, there are only around 4% of people with 401(k) heard about sustainable investing coming from their employer.
This unfamiliarity is the biggest reason why sustainable investments are still not a huge thing and why financial advisors anticipate that this will be the next big thing in the market scene. All of this data came from Wells Fargo/Gallup Investor and Retirement Optimism Index survey and their online survey last February 10 to 16. It is based on 1,029 participants that hold $10,000 or more in their portfolio.
Investors, Companies, and their Personal Values
People are aligning their personal preferences and values to the company they wanted to invest their money in. This information shows many walks of life – from generation X all the way to the millennials.
A huge portion of women investors also agree to align their values and show that they are more likely than men investors to give a fair or a lot of thoughts about the social values companies leaders provide to the public. The same is also true about the companies’ approach with their plans about the environment. They are also more likely to invest in sustainable market funds than men.
A large portion of new generation investors coming from Gen X and Millennial age brackets suggest that they are more likely to invest if their 401(k) programs offer sustainable investment options. This represents the coming of age when it comes to sustainable investment options since the younger generations of investors are now becoming well-versed about the idea.
Investors that had a good grasp of sustainable investing suggest that this market will perform well. Around 69% perceive that it will be on par with the market average. It has more positive feedback than the 24% that said this market would fall below the median line. On the other hand, around 7% believe that it will out-perform other markets in the future.
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