A Schroders Institutional Investor Study has revealed that a clearer sustainability terminology is the major concern of investors who are cautious of “greenwashers”.

According to the results of the Schroders Institutional Investor Study, which surveyed 650 institutional investors across 26 countries during April 2020, a majority (59.9 per cent) are worried and place it as by far the biggest barrier to investing. This concern is followed by lack of transparency in reporting (48.2 per cent) and performance concerns – now less that half of investors at 44.9 per cent.

Hannah Simons, head of sustainability strategy, said: “The astonishing growth of sustainable investing over the last few years has seen a vast range of new ideas and products come to market. With new approaches comes new jargon but definitions are not always clear.”

The results present a dramatically different picture to only one year ago, this year the majority of institutional investors (67 per cent versus 64 per cent ) still say that integrating sustainability into the investment process was their preferred approach, but demand for positive screening (which focuses on best in class companies or investments), and active company engagement, have seen a significant acceleration between 2019 and 2020, rising from 44 per cent to 61 per cent for positive screening, and an even greater jump from 38 per cent to 59 per cent for active engagement.

Share Story: