The Danske Bank unit Danske Invest has recently conducted a survey of investor preferences in Denmark, and the analysis revealed that women are more willing than men to sacrifice returns in order to maintain environmental, social and managerial (ESG) goals.
In fact, 59 percent of men were willing to invest in companies that ignored sustainability, provided they generated higher returns. Among women, the figure was 41 percent.
Despite this, Denmark is one of the greenest countries in the world. Nevertheless, investors do not seem ready to put their money into ESG assets.
It may be that they are in conflict with consumer concerns – especially because they are facing higher inflation and the geopolitical insecurity triggered by Russia’s invasion of Ukraine.
Duty to provide information
Europe’s revised Financial Instruments Markets Directive requires financial advisers to ask their clients about their sustainability preferences.
This follows the information requirement on sustainable finance, which came into force in March 2021 in Europe. It forces the investment industry to document its ESG allocations.
ESG is underperforming
Currently underperforming ESG funds. According to Bloomberg, European ESG funds have lost an average of 8.9 percent this year. The study shows that this result has less impact on women’s involvement in ESG.
“Men are generally more skeptical when it comes to sustainable investments,” says Natalia Setlak, senior strategist at Danske Bank.
According to her, 23 percent of the men surveyed thought the ESG had a “definite negative effect on returns”. Only 10 percent of women held the same view.
Investing in ESG should not involve a choice between sustainability and return, Setlak said.
“There is no reason to assume that companies with a strong sustainability profile will perform worse in the future,” she added.
Source: The Nordic Page