Assets Women want to do good with ESG investments

The coronavirus pandemic has fundamentally changed the world over the past two years. It is not only our view of our own health and that of our friends and family that has changed. More generally speaking, there has been a shift in values that has permeated many areas of society around the world.

Several studies confirm the trend that is also evident in the UBS study “Women on Purpose” from 2022Click here to access the UBS “Women on Purpose” study. The coronavirus crisis has prompted women in particular to try to make more conscious decisions. This is true not only, but especially, when it comes to their finances. For example, according to the UBS report, they plan to donate more to charity or support companies and brands consistent with their values. One component of responsible and sustainable investing is ESG investing.

What is important to you in life? According to the UBS “Women on Purpose“ study, this is a question that 8 out of 10 women have been asking themselves more often and more consciously since the coronavirus pandemic. A question that is not without consequences. For 70 percent of those surveyed, the increased focus on their own values and needs means that they also want to make effective changes in the world. At the same time, almost 9 out of 10 women see money as a catalyst for this change.

Women see financial commitments in particular as a good opportunity to make an active contribution to solving global challenges in the long term. This is also reflected in their actions. In the “Women on Purpose” study, 94 percent report donating to charity or carrying out volunteer work in the past year. In addition, 73 percent say they support brands that are in line with their values and beliefs when making purchasing decisions, and 69 percent do the same regarding their career or employer.

In addition to these financial commitments, a sense of purpose and responsibility is also playing an increasingly important role in investments. Women in particular hope to have a positive impact on global challenges through sustainable investing. According to a survey by wealth management firm RBC Wealth ManagementClick here to access RBC Wealth Management survey, for example, female investors are more committed than men to socially responsible and sustainable investments, such as ESG investments (where ESG stands for Environmental, Social and Governance). According to RBC, there are two reasons for this. Firstly, women are much more interested in information about ESG investments than men. And secondly, 74 percent of them are effectively planning to increase their share of relevant ESG investments in their current portfolios.

The UBS study “Women on Purpose” confirms the findings. Seventy-nine percent of the female investors surveyed make sure their investments correspond to their values. Moreover, ESG does not mean lower returns: three out of four women expect ESG investments to generate comparable or even better returns than traditional investments. Forty-seven percent of the female investors questioned already have investments that are based on ESG criteria.

However, ESG investments grew in importance during the pandemic irrespective of gender issues. The PWC study “The state of ESG disclosure in Asset & Wealth Management”Click here to go to the PWC study page confirms the growing demand for sustainable investment products. The proportion of investment funds oriented toward ESG criteria out of the total number of investment funds on the European market was already 22 percent in 2021, and the trend is rising.

Client advisors at UBS are also feeling the effects of this development. “We are seeing an increase in the number of people interested in investing in ESG investments,” says Sandra Huber-Schütz. Greater awareness of sustainability and ESG investments is sure to fuel the trend over the next three to five years, she explains, and for good reason: “Diversifying a portfolio with sustainable and responsible investments, such as ESG investment funds, not only serves to mitigate risk, but also allows investors to support the positive change necessary for a sustainable economic recovery. Investment funds and companies that follow ESG criteria are in vogue among investors,” adds Sandra Huber-Schütz.

This applies more and more to women as well, since they have an ever-greater financial weighting. Today, they already control one-third of private wealth globally. Coupled with their greater awareness of sustainable investments, women in particular can help shape change in a positive way.