Interest in sustainable investing on the rise in UAE, survey finds

Seven in 10 investors in Emirates wish to leave a positive legacy, says Standard Chartered

Tree growing on stacks of coins on nature background. Saving, accounting and financial concept.

Seventy-four per cent of UAE investors want to leave a positive legacy through sustainable investing compared with a global overage of 65 per cent, according to a survey by Standard Chartered.

Most prefer investments that have a strong, credible story. This is a deciding factor for 70 per cent of UAE respondents when they choose whether to make "impact" investments, compared with 58 per cent overall globally, the survey found.

However, the UAE’s adoption rate for sustainable investing, at 57 per cent, trails behind the global average of 61 per cent. The survey polled 2,040 emerging affluent, affluent and high-net-worth investors in the UK, UAE, Singapore, Hong Kong, China, Taiwan and India between May 20 and June 6.

The Covid-19 pandemic has made people reassess their financial priorities. Investments in assets considered to be responsible from an environmental, social or governance (ESG) perspective continue to grow in popularity.

The combined assets of funds focusing on ESG-related issues had grown to $2.3 trillion by the end of June. This was the fifth consecutive quarter of growth a rise of 12 per cent from the end of March, according to data provider Morningstar.

“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,” said Owen Young, managing director and regional head of wealth management for Africa, Middle East and Europe at Standard Chartered.

Eighty-eight per cent of UAE investors know what sustainable investing is, 80 per cent expressed an interest in ESG investments and 40 per cent of those who had not yet invested in sustainable solutions said they planned to do so in the future, the survey found.

Quote
This signals a valuable opportunity to address global climate change and environmental concerns through financial means
Owen Young, Standard Chartered Bank

However, 56 per cent of investors polled in the UAE said they were apprehensive about sustainable investments, compared with 51 per cent globally.

Many UAE investors seek transparency about the impact of sustainable investing, with 69 per cent saying they need quantitative evidence to be convinced an investment has a social impact. About 47 per cent of investors said they have concerns about the financial performance of sustainable investments and 43 per cent believe donations can achieve a more immediate social outcome, the survey found.

UAE investors also believe sustainable investments can do good and provide a financial return. About 78 per cent believe it is possible to do good and make money at the same time, compared with 75 per cent globally.

Meanwhile, the allocation of sustainable investments in investor portfolios is on the rise. Thirteen per cent of UAE investors already have more than 25 per cent of their total investments channelled into sustainable solutions, compared with just 2 per cent of investors in 2020, according to Standard Chartered.

Updated: September 27th 2021, 5:02 AM
EDITOR'S PICKS
NEWSLETTERS