Dubai, UAE: Standard Chartered's latest survey, the Sustainable Investing Review 2021, shows that there is a heightened desire to leave a positive legacy in the UAE in the area of sustainable investing, with 74 per cent of investors in the UAE reporting this is important compared to 65 per cent overall.
The majority of UAE investors prefer investments that have a strong, credible story, with this being a pivotal factor for 70 per cent of UAE respondents compared to 58 per cent overall. The key to reaching the tipping point for sustainable investments in the UAE could lie in financial institutions sharing compelling stories that highlight the positive social and environmental outcomes for the next generation.
The UAE is on an upward trajectory when it comes to sustainable investing but its adoption rate of 57 per cent is slightly lower than the global average of 61 per cent. However, given 74 per cent express a desire to leave a positive legacy, compared to the global average of 65 per cent, the UAE could overtake other markets in terms of adoption going forward.
At the same time, the survey finds that 56 per cent of investors in the UAE are apprehensive about sustainable investments compared to 51 per cent overall, with 78 per cent believing it is possible to do good and make money at the same time, compared to 75 per cent overall.
Dr. Owen Young, Managing Director, Regional Head of Wealth Management for Africa, Middle East & Europe at Standard Chartered Bank , said:“Our findings show that interest for sustainable investments in the UAE, and across international markets, is at an all-time high, signalling a valuable opportunity to address global climate change and environmental concerns through financial means. Although investor interest in these investments has been confirmed, it is the responsibility of corporates to provide a compelling sustainability narrative that truly emphasises the positive impact of their operations on global environmental, social, and governance objectives, with an overwhelming 70 per cent of UAE investors preferring investments that showcase robust sustainability stories. Alongside Standard Chartered's deep commitment to provide sustainable financing solutions, we also look to play a driving role in advocating for greater capital formation and channelling towards sustainable corporates and projects.”
The Sustainable Investing Review 2021 gauged sustainable investing trends among the emerging affluent, affluent, and high net worth investors and revealed that sustainable investing is at a tipping point, with awareness and interest at an all-time high. However, investor apprehensions – lack of measurement and transparency topping the list – are preventing sustainable investing from becoming more mainstream.
The survey revealed an upward trend in sustainable investing among more than 2,000 investors, representing USD11 billion in AUM, surveyed in Mainland China, Hong Kong, Taiwan, Singapore, India, the UAE and UK. Overall, the allocation of sustainable investments in investor portfolios is on the rise: 13 per cent of investors already have more than 25 per cent of total investments channelled into sustainable solutions, compared to just 2 per cent of investors in 2020.
In the UAE, the research identified trends across a four-stage adoption cycle:
1. Awareness – 88 per cent of UAE respondents know what suitable investing is
2. Interest – 80 per cent show interest in sustainable investing
3. Intention – 40 per cent of those who have not yet invested in sustainable solutions plan to in the future
4. Adoption – 57 per cent have placed funds in a sustainable investment solution
Investors in the UAE shared a number of apprehensions that are holding them back from taking action i.e. crossing over from the stages of awareness, interest and intention to actual adoption:
· Transparency of the impact of sustainable investing : 69 per cent of investors need quantitative evidence to be convinced an investment had a social impact
· Financial performance: 47 per cent of investors have concerns about the financial performance of sustainable investments
· The direct donation alternative : 43 per cent believe donations can achieve a more immediate social outcome
About the Sustainable Investing Review 2021 :
Standard Chartered commissioned behavioural finance experts, Oxford Risk, to conduct this research between 20 May and 6 June 2021. Respondents in 2021 included 2,040 investors from a range of wealth profiles located in UK, UAE, Singapore, Hong Kong, mainland China, Taiwan and India. The survey used robust behavioural and attitudinal techniques and was the same for each respondent, save for the order of statements, which were randomised to ensure academically reliable results. Throughout the survey we asked respondents to consider
the following definition of 'sustainable investments'. Sustainable investing is investing capital in businesses, funds or other financial vehicles that actively seek to generate not only financial returns but also social and/
or environmental benefits. Respondents in 2020 included 1,085 investors from UK, UAE, Singapore, and Hong Kong.
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