The past few years have brought outstanding progress in sustainable finance. A confluence of overpowering global challenges – climate change, COVID-19, social unrest – drew clear lines between financial markets and environmental, social, and governance (ESG) factors.
There is no question that momentum is on the side of sustainable investing, with a higher percentage of capital flowing into ESG. We are miles away from where we started, but the financial community has a long way to go when it comes to figuring out how to integrate ESG and consistently communicate its role for investors.
That’s why we were thrilled to see hundreds of financial professionals turn out for the recent virtual conference, The Great Repricing: Financial Advice in the Age of Climate Change. Hosted by Gitterman Asset Management and TheImpact, the agenda brought a steady stream of content highlighting trends in climate disruption and financial instruments that can be part of the solution.
Dozens of speakers joined the effort. The UN Climate Defense Fund and NASA shared the virtual floor with experts from Morningstar to Moody’s to Parnassus to Saturna Capital.
Cerulli Associates shared noteworthy findings from its recent ESG survey, identifying a significant gap in investor demand and financial advisor offerings. Retail investors have shown steadily increasing interest in sustainable investing, with 49% agreeing they would prefer to invest in companies that have a positive environment or social impact. Yet 51% of advisors cited lack of client demand as the primary reason for not adopting ESG strategies, and a whopping 73% of advisors allocate less than 10% of client assets to ESG investments.
Clearly, there’s a disconnect. It’s a complicated gap, with questions swirling about product authenticity, consistency among ratings agencies, and a host of misconceptions and hesitations about ESG among the advisor community.
These issues combine to create confusion: how can advisors communicate with clients and prospects about ESG, when it’s so difficult to follow for the professional investment community?
We offered guidance at the event through our presentation on Effectively Marketing Your ESG Story. We shared perspective that has been shaped through work with organizations across the sustainable investing spectrum – from the earliest pioneers to newcomers seeking to integrate ESG in the current marketplace.
You can learn more about our thoughts in the below webinar or by reaching out with questions about our approach.
