Pru’s recent ‘Power of Sustainable Living’ report has uncovered useful consumer behaviour information for advisers. The study seeks to understand whether, and if so how, consumers’ attitudes and behaviours may be changing for good as a result of the dramatic global changes taking place. Its findings act as a powerful reminder why advisers’ can no longer ignore the fact that their client proposition must be tailored to today’s clients’ changing values and needs.
The idea of living consciously is gathering strong momentum here in the UK and globally. November’s United Nations’ COP26 climate summit reminded us all of the huge environmental disasters which our planet faces from rising CO2 emissions unless decisive action is taken urgently by governments, corporations big and small and individual citizens across the globe too. We must all play our part if we are to avoid the very worst impacts for people and the planet.
Such changes to consumer behaviours have implications for the way in which financial advice is delivered too. The new ‘Power of Sustainable Living’ research carried out by Pru* involved 2000 people in the UK. It explores how people’s attitudes have changed and the power which everyday actions and decisions can have, especially when it comes to their finances and investing.
Considerations for ESG investing
According to Pru’s survey findings, the main influence on people wanting to invest sustainably is their own moral compass (44%), ahead of friends (16%) and wider family members (13%). 30% say their investments are sustainable, of which more men than women agree with this (38% vs 23%).
When asked what would encourage them to invest more sustainably, those respondents with investments said that knowing that it will not negatively impact their returns (33%) was the key consideration. Developing their knowledge of the options (28%) and knowing their investments will make a difference for the better (27%) were also popular.
Those survey respondents who don’t invest sustainably say they need more information to be able to make a decision (22%), or they don’t know how to go about it (19%).More women than men say they don’t know how to go about it (22% vs 14%), and the same number don’t know how to.
Three-quarters (75%) of people surveyed by Pru think that children should be taught about sustainable investing, whilst the same percentage (75%) said that they believe it is everybody’s responsibility to live a conscious or sustainable life.
More than half (57%) of respondents say they would avoid investing in a company, shopping at a store or banking with a company if they knew they acted in an environmentally irresponsible manner. 44% of those surveyed believe that investments should have to include a portion within sustainable funds.
What is the ‘new normal’?
We are all having to adjust to life alongside Covid-19 as well as trying to do our best to help the planet by changing our behaviours. However, instead of just going back to how things were in every aspect of our lives, the ‘Power of Sustainable Living’ report indicates that many of those surveyed are actively focused on trying to change things for the better and the future.
It’s not only our day to day actions that can make a difference but where we put our money too. As more and more clients demand sustainability as a core investment theme, advisers will be well placed to ensure that appropriate processes are put in place to deliver those outcomes that clients really want. The power of sustainable living has been recognised. For advisers, ignoring it is no longer an option.
To view the full Power of Sustainable Living report, please click here (https://www.pru.co.uk/investments/investment-articles/power-of-you-report/)
And click here to find out more about the PruFund Planet range (https://www.pruadviser.co.uk/funds/prufund-planet?utm_source=ifamag&utm_medium=article&utm_campaign=prufundplanet&utm_content=partnership)