Holly's Blog: Which sustainable tribe are YOU in?

This week we launched The Great British Sustainable Savers Census. 6,000 people. 6 types of Sustainable Saver.

This week we launched The Great British Sustainable Savers Census – kindly supported and sponsored by Aberdeen Standard Investments. Over the last two months we have checked in with over 6,000 people in the UK to see where they sit on the sustainability spectrum. What do you like? Want? Understand? Plan to do….?

It's a mixed bag with some trade-offs

• Covid has made a difference - there’s been a lot of soul searching out there, revised plans and intentions and people are MUCH more receptive to these ideas than they were 12 months ago.

• You’re interested! 8 out of 10 of you with a financial adviser would like to talk to him/her about it – but you might need to tell them! Just half of financial advisers think their clients would be interested in this.

• I don’t have to give up on returns - in just 12 months (perhaps fuelled by recent financial factors such as the relative under-performance of oil stocks, etc) we’ve stopped assuming that investing this way means you will make less.

• BUT - it’s not a slam dunk for sustainability – when we told people that oil stocks paid a dividend of about 10p a year for every £1 invested, 67% perked up and said they would be likely to invest in oil stocks

• And our readers can be tempted into sin as well ;0) – almost a third of you (29%) would invest in ‘sin stocks’ (fags, coal, porn etc) if it meant an additional 3% return, rising to 43% if returns were an extra 7%...

As for the converts (or impending converts) here’s what you said

The time has come! To date I haven't seen products that catch my eye but with the state of the world I feel it is time to consider investments that potentially have a less detrimental affect on the planet than perhaps some I already hold.

Male, 65-74, considering

Personal ethics plus I don't see why they shouldn't return the same or better than standard funds. In theory 'good' business should create good business.

Female, 35-44, currently hold

It makes sense financially and is the right thing to do. These companies will become the norm rather than exceptions.

Male, 45-54, currently hold

Which tribe are you in?

We sifted through the data and split UK savers and investors into 6 ‘tribes’. On a spectrum ranging from Eco Warriors – “environment first, financial gain second” – to the Pure Returns –“I invest to make money and don’t really care about anything else”.

We then went to our research partner Morningstar and worked with them to map a few funds to each tribe. I think and hope this is really helpful. The most common UK tribe is the Moderate Greens – over 14 million British savers and investors fall into this camp. You invest primarily for returns, but you do care about the environment in a secondary way. In your personal lives, recycling, cutting down on food waste and then shopping locally are your three main ways of playing your part.

Take the super short quiz, see what tribe you’re in and have a look at which funds will help you achieve your financial and personal goals. You can see the full list of funds mapped to each of the 6 tribes here (https://www.boringmoney.co.uk/learn/articles/which-sustainable-saver-are-you/).

Buyer Beware

This stuff is complicated. Every fund manager under the sun has cottoned on to the fact that if you shove Sustainable into a name, you will sell more. It’s the investment equivalent of the word ‘Artisan’ in the food industry.

And it is genuinely complex. For example, 4 in 10 investors thought that a Sustainable, or Positive Change or ESG fund would hold no oil stocks. Not true. They will probably own less than the average, but our expectations should be that these types of funds will be ‘less bad’ rather than perfect. The argument is that if you are a Big Whopping Fund Manager, and you own shares en masse, you have klout and you can turn up at shareholder meetings, block things and generally be a corporate pain in the bum if the development agenda is not progressive enough.

Here come the Multi-Asset solutions

Perhaps the most activity we see in product development is in sustainable multi-asset funds. Coming to a cinema near you soon. More broadly, the vanilla versions of these ‘ready-made’ investment solutions can be a good idea for many investors struggling to know what to do in these bonkers times – we’ve added a section explaining these funds more generally (https://www.boringmoney.co.uk/learn/investing-guides/product-guides/multi-asset-funds-explained/) on our site. With a video (https://vimeo.com/464126217) we made with some ‘normal people’ who explain what these things are in realspeak!

Have a lovely weekend all. Not that there is a lot to do. And nowhere to go. And it’s cold and raining. But you know – all that aside – have a cracking one!

Holly

P.S.

A thank you

This week Martin Gilbert retired as the Chairman of Aberdeen Standard Investments. Martin founded Aberdeen Asset Management in 1983 and managed a modest £50 million in that first year. By last year that had risen to £308 billion in the now merged entity. I went to see Martin about 3 years ago (that was a frightening morning!), with little more than energy, ideas and a plan. To make investing less complex and to help people make better choices. He backed me. And Aberdeen invested in the business.

As much as I make it my business to give the industry a regular kick up the bum, and to call out what’s broken, there are a few very senior people around who have really supported me and my mission. And not just tolerated, but sought out the critiques fuelled by a genuine desire to be better. We all need a backer like Martin. It was a real turning point for me – thank you for being a Chairman of a FTSE100 but for finding the time for today’s small fish like me. It meant more than I suspect you know.