UAE clients are increasing their allocation to investments that take an ethical stance, despite a lack of information about the strategy.
According to Schroders’ client research, Emiratis are interested in ethical and sustainable investing but 72% said a lack of information prevents them from investing, or investing more.
In the UAE, a lack of information on how sustainable fund managers are engaging with the companies they invest in was cited by 35% of respondents as the issue that was holding them back from taking the plunge.
A lack of advice was given as the reason by 33%.
A quarter of respondents said they were unsure which products take a sustainable approach and 10% said they couldn’t define what sustainable investments are.
Most said they wanted investments that work towards ending bribery and corruption; mitigate climate change; treat a diverse workforce well; and don’t sell addictive or unhealthy products.
In their everyday lives, 68% of UAE investors said they bought goods and services from socially responsible businesses with locally made products, reflecting widespread interest in living ethically.
Sustainable investing for experienced investors
Sustainable investing is becoming more important to 86% of respondents with only 22% saying they thought this stance would hurt their returns.
The majority (77%) of respondents said they had increased investments in sustainable funds over the past five years, with an average of 44% of their portfolio allocated to such investments.
It was a proportion, said Schroders, which increased as investors’ expertise and experience increased.
Jessica Ground, global head of stewardship at Schroders, said: “It is particularly interesting that knowledgeable investors were more likely to invest sustainably. This emphasises the work the industry still needs to do to educate all investors about the potential benefits of investing sustainably.
“Clearly, barriers still remain preventing investors from embracing this approach, highlighting that the availability, transparency and advice around these funds requires improving.”
