Key Sentence:
- In an age of investing with sustainability and environmental, social, and governance (ESG) implications.
- The non-financial factors that investors use to identify significant risks and growth opportunities have become fashionable.
But not for everyone. According to a study by new fund manager DUGUUD, this jargon misleads many in the industry and prevents them from investing in companies that help the environment and society.
A survey of 3,000 adults found that only 10% knew and could explain the term impact investing, but 60% agreed that it could positively impact the environment and society. And three times as many people agree that if they had the funds to invest, they would be happy to support this area.
“It’s time for the entire financial services industry to let go of terms like impact investing and ESG and speak a language that everyone understands,” said David Scrivens, CEO and serial entrepreneur of DUGUUD.
DUGUID, a trading name for Amberside Capital, is managed by FCA Fund Manager, which launched this month and focuses on climate change, increasing biodiversity, improving public health, reducing inequality, and improving education. It emerged from the need to create a platform that would allow the general public to invest in companies that make a real and positive difference globally.
“It’s difficult and expensive to launch publicly available funds, and it takes high marketing costs to get them,” Scrivens said. “Most investment managers force institutional investors like pension funds to make the minimum investment required to start a fund, but this time it’s often closed by the public.”
The survey also revealed significant cynicism: 58% of respondents believe that most companies that say they are doing well are spending more time and money marketing their environmental and social intentions than taking concrete action. Two-thirds (67%) agree that there are now so many companies claiming they are doing better for the environment and society that it is difficult for them to believe the real impact of most of their claims.