Financial consultants & customers

Il Sole24 Ore | 17 December 2020 by Lucilla Incorvati

Because wealth and culture (for now) push more towards ESG investments?

According to the latest Finer survey which mapped the 4.5 million clients of financial advisors, it is above all the most educated and richest who invest in a green way.

Of the 4,400 billion Italian household savings, almost 85% (3,700 billion) refer to those who have financial wealth exceeding 50 thousand euros (affluent customers), to those with at least 200 thousand (upper affluent) but above all to individuals with assets of no less than 500 thousand euros. According to many, ESG investments could build an opportunity to help convert the enormous amount of liquidity that lies on the current accounts held by these segments of the population (1.4 billion). But within a variegated universe, for now, the concrete interest in investing in ESG strategies is mainly the prerogative of those with greater financial resources and a higher level of education.

Finer research

This was revealed by the latest study by the research company Finer Finance Explorer (ESG investments the awakening of Italians: comparison between supply and demand) which has mapped the entire universe of 4.5 million savers today through a representative sample of 10,000 interviews. served by financial advisors. Customers were divided into three categories: affluent or those who invested financial wealth between 50 and 200 thousand euros; upper affluents and therefore those with wealth between 200 and 500 thousand euros; finally, private customers, or entities with financial wealth between 500 thousand euros and over one million euros.

The results were then integrated with other evidence drawn from the three continuous observatories that Finer carries out each year, involving 3,300 financial consultants, 1,700 private bankers and 2,000 bank managers. The interviews were carried out between June and November 2020.

The richest and most educated reward ESG investment

The level of knowledge of ESG investments grows with the size of the financial assets but also with a higher level of education. In other words: those with a greater basic culture also demonstrate greater knowledge and competence on ESG issues and in any case a greater degree of information on these issues.

The level of propensity towards ESG issues, already growing in the last 24 months and triggered by environmental catastrophes, accelerated significantly after the outbreak of the pandemic. The sensitivity towards environmental issues is unanimous (E), that towards the issues relating to governance (G) and social impact (S) is decidedly greater among those with high wealth.

Going into detail, 55% of private customers (most of the reference universe) claim to know the subject well while 78% of affluent customers (most of the cluster universe) have only heard of it like this like 66% of upper affluents.

The propensity to underwrite ESG investments also grows with the size of the financial assets. Those who want to invest in the last few months (+ 20%) are always the richest and most informed on the subject. This is 57% of private customers (the largest share) compared to only 17% of affluents (the lowest share of the group) and 41% of the upper affluent group.

Among those with a greater propensity there is the awareness of the greater industrial and financial success of listed companies that embrace ESG values ​​but also the desire to leave a better future for future generations. While respect for the environment as a common good to be protected is a shared value even by those who have a lower propensity to invest in green strategies.

Fears and qualms of savers

The barriers to underwriting ESG investments are partly linked to the fear that it is a passing fad, but above all to the lack of knowledge of the proponents and the mistaken belief that investing in ESG companies or instruments can lead to lower returns.

«In carrying out this research that was commissioned to us by Nordea, historical asset manager in the ESG world – underlines Nicola Ronchetti, founder of Finer – we found that a great responsibility for the success of ESG investments lies with distribution. Indeed, I would say that the soil has never been so fertile and it is therefore up to the networks of financial advisors and banks to sow and reap the fruits in the interest of our planet and its inhabitants “.