- HL’s latest survey reveals that 70% of HL clients believe environmental social and governance (ESG) issues are important, with governance ranked the most important.
- Cyber security, anti-corruption and anti-bribery are among the ESG themes HL clients care about most.
- HL investors are increasingly comfortable investing in companies involved with nuclear energy.
- 47% are happy to invest in companies that don’t meet their values, if a fund manager is engaging encourage improvement. 34% would prefer to avoid such investments entirely.
Dominic Rowles, lead ESG analyst, Hargreaves Lansdown:
“The past couple of years have been challenging for ESG. It has attracted criticism from high-profile politicians, including US President Donald Trump, leading to heightened policy uncertainty. At the same time, some companies and fund managers have scaled back their ESG commitments, further complicating the landscape.
Every two years, HL run a Sustainable Investor Survey to understand our clients’ perspectives on environmental, social, and governance (ESG) issues – the three criteria used to measure the sustainability and social impact of an investment or a company.
Despite challenges in recent years, ESG still enjoys broad support from HL clients. 70% rated ESG issues ‘very’ or ‘extremely’ important. Governance issues were ranked the most important, followed by social and environmental.
What issues clients care about most
Against a backdrop of rising global tensions, HL clients prioritise security and governance, with cyber security, anti-corruption, and anti-bribery leading the way. Pollution prevention, water security, and food security also rank highly, reflecting concerns about health, wellbeing, and stability. Diversity and inclusion, along with artificial intelligence (AI), scored lower overall, possibly due to perceived lower financial impact.
Where clients draw the line
We also asked clients how comfortable they were to invest in a range of commonly excluded industries. HL clients showed increased comfort with investing in nuclear energy, oil and gas, and alcohol, with 81% comfortable with nuclear energy investments, up from 61% in our previous survey. Conversely, deforestation and animal testing were the least acceptable areas, highlighting strong ethical concerns. Generational divides were evident, with older clients more comfortable with military contracting than younger investors.
Engagement over exclusion
Almost half of respondents said they would be prepared to invest in a fund holding companies that don’t meet their values, if the fund manager was actively pushing for change on their behalf. This supports the idea that responsible investing can involve engagement rather than exclusion. However, 34% prefer to avoid misaligned investments entirely, up from 29% in our previous survey.”
About the HL ESG engagement survey
This survey runs every two years. Our latest survey closed on 14 December 2024. 1,681 HL investors took part.
