Fossil Free Indexes, in association with 350.org, surveyed retail investors over the past few months on their perception of divestment and fossil fuel free investment options. Three hundred and sixty respondents, reached predominantly through non profit advocacy groups, overwhelmingly expressed concern about climate risk, with 97% strongly agreeing that climate change was a concern. Moreover, most respondents, 82%, have thought about divestment from oil and gas and coal companies, and 69% agreed that divestment is a positive tactic to combat climate risk, with only 4% strongly disagreeing with this tactic. Investors were motivated by more than just climate risk when they think about divestment – 66% expressed concern about portfolio risk associated with fossil fuel investments.
Most, 90% of investors surveyed, indicated that they were ready to invest once a fossil free investment product was offered that matches their investment strategy and satisfies their concerns. Among their considerations, 42% of respondents expressed concern about returns, and 30% had concerns about fees. Importantly, the willingness of investors to take some return risk to advance their environmental objectives was evident as 58% of respondents disagreed that returns were a concern, or were neutral on the issue.
90% of investors surveyed, indicated that they were ready to invest once a fossil free investment product was offered that matches their investment strategy and satisfies their concerns.
Understanding how to implement divestment for a personal portfolio was limited, indicating an opportunity for financial advisors to dedicate more effort to education in ethical investing, and specifically to divestment. For example, of those who have heard about divestment, 56% still don’t know what investment options are available to meet this goal. And further, to the extent they are aware of fossil free investment options, a full 71% don’t know which option is best.
Respondents were primarily from the US and Canada (90%) , 63% were over 45 years old., and 37% had investment portfolio’s of over $250,000.
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