sustainable investing

Do your clients care about sustainable investing?

Increased interest means clients may be ready to get involved.

Sustainable investing has gained a lot of attention over the past few years, and new findings from an Allianz Life Insurance Company of North America (Allianz Life) study indicate it isn’t going away anytime soon. If your clients haven’t already broached the subject, it may be only a matter of time.

That’s because the interest and demand for sustainable investing is reaching new levels. In fact, nearly two-thirds (64%) of people currently hold a positive overall opinion on this type of investing, according to the 2021 Allianz Life Sustainable Investing Study. The study also found that many Americans are interested in taking action on making sustainable investments.

Even among respondents who are not currently participating in sustainable investing, more than half (52%) expressed interest in allocating funds to sustainable investments. 

And those who are already actively allocating funds to sustainable investment opportunities appear committed to stay the course. In fact, among investors who are already participating, they report putting nearly half (46%) of their total investment portfolio toward companies adhering to sustainability principles.

In addition, they are not afraid to use their investments as a way to reward or punish companies for their sustainability practices – or lack thereof. More than two-thirds (68%) of Americans believe that reallocating investments away from companies not adhering to sustainability principles (to those that do) is an effective way to punish or reward companies for their actions.

Holding financial services and insurance companies accountable

Another interesting finding from the study is on the role of financial services and insurance companies in supporting sustainability efforts overall. Nearly two-thirds (64%) of respondents agreed that a financial services company can have a significant impact on environmental sustainability efforts, and that, collectively, a commitment in the financial services industry to environmental sustainability could make a positive difference (68%). They held similar beliefs about the role insurance companies can play in supporting these efforts. More than 61% indicated that an insurance company can have significant impact on environmental sustainability efforts, and that if the insurance industry committed to these efforts, it would make a positive difference (64%).

This increased focus on the financial services and insurance industries is also shaping new ideals. More than six in 10 Americans (63%) believe that financial services companies have a responsibility to do whatever they can to mitigate the climate crisis, and 59% felt insurance companies have the same obligation.

With these increased expectations, however, comes a need for greater awareness of the investing process. Only 52% of people understand how financial services companies make decisions about how to invest their money, and fewer (38%) are aware of specific financial services companies that successfully invest their assets in environmental sustainability efforts. Fewer understand how insurance companies make investment decisions (46%) or know any insurance companies successfully investing in environmentally responsible ways (31%).

As more and more clients begin to express interest in sustainable investing, investment professionals can work with them to understand what their goals are, what issues are important to them, and also help them understand which organizations are honoring their commitments to sustainability.

In fact, among investors who are working with a financial professional, 69% agree that their financial professional should inform them of the business practices of the companies they invest in, and 73% say they want their financial professional to make sure their investments reflect their values.

* Allianz Life conducted an online survey in April 2021 with a nationally representative sample of 1,000 respondents age 18+ with an annual household income of at least $50,000.

Products are issued by Allianz Life Insurance Company of North America.