March 10, 2009
A recent special report by Ethical Corp. discusses the lack of targeting by socially responsible investment funds of high net-worth individuals. The report looks at the rising demand for “green” investment options by the super-wealthy of the world. Whilst markets are tumbling around the world, the total amount of wealth controlled by this group is still staggering.
The special report focuses on the relatively low amounts currently invested – both as a total sum and as a percentage of the average portfolio – and the constraints to increasing these numbers.
Yet, it would seem that this is a vital area. The funding of new technologies that can have positive impacts in reducing emissions is vital if these fledgling companies are to grow and develop products as quickly as the world now needs.
To quote from the report, “Jaap van den Ende, head of socially responsible investing at ING Netherlands, says: “Under current market circumstances there is not really a strong demand for anything at the moment, but clearly there is a strong interest in these kinds of products.” He adds that sustainable investments are not inherently riskier than traditional products. “Socially responsible investing provides something extra, but not extra risk.”
This suggestion that the risk profile is little changed from more traditional investments and funds ought to assist the ethical investment industry in their marketing of these specialised investment products. However, with the world in economic turmoil, this may not happen soon…
Therefore, it would seem that the industry needs to be targeting the ultra-rich rather than the average “man on the street” in search of new investment funds.
Stuart Langridge, Director of BlogactivStuart Langridge