Investing with a focus on environmental, social and governance (ESG) issues continues to gain momentum among individual investors, with women at the forefront of the trend, according to a new survey.
In the survey, Women were twice as likely as men to say that it is "extremely important" that the companies they invest in integrate ESG factors into their policies and decisions, according to RBC (Royal Bank of Canada) Wealth Management — U.S., which polled 1,003 of its wealth management clients for the report.
Women also expressed more interest in broadening their ESG investing, with 74% saying they were interested in increasing the share of ESG investments in their portfolios, according to the survey. This compared with 53% of men respondents expressing an interest in expanding the ESG allocations of their portfolios. Overall, 61% of respondents expressed this desire.
"The results from this survey reinforce a belief we've had for several years: that responsible investing is poised to become a dominant strategy in the U.S. and that women are leading the adoption," Kent McClanahan, vice-president for responsible investing at RBC Wealth Management–U.S, said in a prepared statement.
Thirty-one percent of all clients surveyed "acknowledged the importance of integrating ESG factors into their investment decisions," the firm said, adding that women felt stronger than men about environmental and social factors, while both genders felt equally about corporate governance.
Asked to identify the social issues of most concern to them, women in the firm's survey ranked human rights the highest (80%), followed by workplace health and safety (75%) and social justice (64%). The firm said men also placed these factors at the top, but at lower levels: 62%, 67% and 44%, respectively.
"While these issues likely have been important to women for some time, the growing interest in the "S" factor has no doubt also been impacted by the events of 2020, which put a spotlight on social justice and the effects of systemic racism," McClanahan said.
Citing the growing popularity of ESG investing in the U.S., the firm noted that a recent report by US SIF: The Forum for Sustainable and Responsible Investment a nonprofit foundation found that, as of the start of 2020, about $17.1 trillion was invested in ESG investments in the U.S., which represented a 42% increase from $12 trillion two years earlier.
The survey also found that 86% of clients would turn to their financial advisors to find out more about ESG investing.
"Advisors need to be prepared to engage in conversation and proactively approach the topic of responsible investing with clients, who are seeking their expertise and guidance as they navigate through new ESG investing opportunities," McClanahan added. "Responsible investing is an area that will continue to grow as clients express greater interest. RBC Wealth Management will be ready to provide the advice and tools to confidently include ESG investments in clients' portfolios."
RBC Wealth Management has $463 billion in client assets under management and more than 2,000 financial advisors in 178 locations in 42 states.
