Socially responsible investing (SRI) continues to be a key area of focus for financial advisers, according to an online survey of 618 advisers by Eaton Vance.
Seventy-nine percent have incorporated SRI into their practices, and among this group, 44% say it is an important part of their practice, up from 31% in the second quarter. Thirty-five percent said that clients’ interest in SRI is growing, and 60% said that it is an ongoing topic of discussion.
“Responsible investing strategies allow advisers to take a more holistic approach to wealth management with their clients,” says Anthony Eames, director of responsible investing strategy at Calvert Research and Management, with which Eaton Vance collaborated on this research. “As responsible investing gains in popularity, there’s increased dialogue between advisers and their clients.”
Fifty-six percent of advisers said SRI is driving new business to their practices, yet only 35% said they are very well informed about the topic.
“We are working to bridge this information gap by offering advisers enhanced tools and educational programs,” Eames continues. “Offering a full suite of responsible investing solutions can be a key differentiator for advisers trying to deepen and expand their client relationships.”
Eighty-seven percent of advisers said a robust research program is important for environmental, social and governance (ESG) analysis, but 67% said it is difficult to obtain measurable, quantitative sustainability data from companies, and 54% said they do not understand the connection between ESG and financial performance.
Jessica Milano, director of ESG research for Calvert Research and Management, says there is a direct correlation between the two: “Calvert’s proprietary research process leverages multiple data sources to capture and analyze ESG factors that drive company financial performance over the long term. Data show that firms that optimize their ESG practices tend to be rewarded for their efforts, along with their shareholders.”
Ninety-three percent of advisers said that demonstrating the impact of ESG investments is important to them and their clients, and 82% said it is important to engage with company leadership to drive positive business and ESG outcomes.