UK financial advisers have been feeling more negative about environmental, social and governance investing across the year.
This is one of the findings from the first three months of FT Adviser's EnlightenESG interactive profiler, brought to readers exclusively from FT Adviser and Pacific Asset Management.
The study shows that, from having strongly positive sentiment towards ESG at the start of 2022, various factors have combined to give advisers pause for thought when it comes to their own investments in ESG-oriented assets.
As the image above indicates, the first tranche of respondents to our survey - which you can still take here - were broadly negative on ESG sentiment, down 2 per cent compared with the long-term benchmark average of 0.
The benchmark is set using monthly data from all the respondents of Enlighten's ESG study since its launch in January 2022, and a composite sentiment indicator has been created to test how broad views on sustainability are changing over time.
Will Thompson, chief sustainability officer for Pacific Asset Management, said: "We can see that initially, sustainability sentiment was increasing.
"This was because post-Covid, fiscal stimulus - aimed at combatting key issues such as de-carbonisation; the successful COP 27 summit; and strong performance from sustainability strategies in investment were positive for the sector.
"However, more recently, with rising geopolitical tensions, greater focus on inflation and cost-of-living, as well as energy crises in Europe, we see that sustainability sentiment has fallen."
Advisers have also been waiting, perhaps, for greater certainty after the Financial Conduct Authority's sustainability disclosure requirements, which were finally revealed in November.
Other findings suggested that, broadly, readers were not averse to investing along ESG principles, with high percentages of respondents stating they would be prepared to invest for longer in order to put their money into more ESG-oriented funds.
According to the first tranche results, 48 per cent of FT Adviser readers said they would be prepared to accept a slightly longer time frame with ESG-aligned portfolios in order to reach their financial goals (see image).
Only 30 per cent of reader respondents would be prepared to accept slightly higher charges if their investments were going to make a positive environmental, social or governance impact, however.
How the FT Adviser/ EnlightenESG Profiler works
The profiler sits on FT Adviser's ESG Investing page: https://www.ftadviser.com/esg-investing/
All data is anonymised and aims to capture changing sentiment from those who have already taken it once, to those who have never taken it before.
Using the data from all of the respondents of Enlighten since its launch in January 2022, Enlighten created a composite sentiment indicator.
To do this, it normalises every question response from every person that has taken it, month by month.
This helps to gauge how readers are feeling about ESG issues as the year progresses.
FT Adviser is grateful to those advisers who have taken the time to speak with us about how we can tweak existing questions and add more to keep the profiler fresh and dynamic.
