Britain lags significantly behind some of its European counterparts when it comes to investing in ethical and sustainable financial products, according to new research.
Conducted by Tooley Street Research, the report indicates that UK investors contribute to social impact financial products – which yield a financial return while also financing organisations and enterprises to help countries become economically self-sufficient – far less than European investors.
British investors have invested a total of €1.4bn (£1.1bn, $1.7bn) in social impact investments, which is equivalent to €22 per head, whereas the Netherlands and Switzerland have invested nearly 24 times this amount, with each investor contributing more than €500 each.
The UK sits at sixth place, in front of Germany and France, which invest less than €17 per head, and Spain which sees each investor contribute the equivalent of €2.
Oikocredit, an investment society centred on global development, commissioned the Europe-wide survey and has said UK investors trail behind European counterparts because of “low awareness and understanding of socially responsible impact investments as an alternative to other financial products or overseas donations”.
However, the Cabinet office has cited the UK’s growing appetite in this area.
National Director of Oikocredit UK/IRE, Monica Middleton, said: “The findings are in stark contrast to the UK’s heritage for charitable giving, and the recent boom in other sustainable lifestyle choices made by consumers, such as Fairtrade.
“There is significant potential for the social investment category, which sits between traditional finance products and charitable giving, and we are working hard to increase awareness and understanding of social impact investment options available to individuals and institutions over here.”
Now sitting at £20bn, the European impact investment market is growing rapidly, and there are an increasing number of products available on the market, including shares, bonds and pension funds, which are measured both for their social outcomes and their financial performance.