Perceived cost of "going green" keeps many Canadians away from sustainable investing
A study from the Co-operators group released late last week found that while many Canadians want to act and invest sustainably, they are put off by what they perceive to be a higher price. Only 23% of the Canadians surveyed said they are willing to pay a premium for sustainable investment products. Co-operators emphasized that their findings reflect a “misconception” around sustainable investing: that sustainable, ethical, or responsible investing costs more.
"The survey results are enlightening," says Rob Wesseling, President and CEO of Co-operators. "While Canadians clearly understand the need to support sustainable initiatives, misleading information about the costs could be holding some investors back. It's critical that Canadians are educated about the availability of investment products and solutions that enable them to make a substantive social difference, alongside compelling financial returns. At its core, sustainable investing ensures that financial security and societal betterment go hand in hand."
73% of survey respondents placed some importance in sustainability while 62% highlighted the importance of supporting sustainable companies. Only 23% of respondents, however, said they would be willing to pay a premium for sustainable investment products.
Inflation has played a role in this reticence, according to the survey. Over half of respondents, and 62% of those aged 18-24, said they were interested in supporting sustainable companies before rising inflation, living costs and interest rates “made things too expensive.”
Despite the association of sustainability with a premium, around half of survey respondents said they care about sustainable investing. 29% said they care enough to invest sustainably even if the returns aren’t as promising as non-sustainable options. 38% said they would only invest sustainably if the fund outperformed non-sustainable options.
The survey was conducted in July of this year and involved 1,500 adult Canadian residents. Leger opinion worked on the survey and the associated margin of error for the survey was ±3% 19 times out of 20.
In the press release, Co-operators noted that some sustainable investment funds can match or exceed performance of funds without a sustainable level.
"As an investor, it's important that you're empowered with the information you need to align your investment strategy with your values", says Jessica Baker, Co-operators EVP of Retail Wealth. "The idea that investors have to sacrifice performance or pay more to go 'green' with their investment portfolios simply isn't true. How much or how little investors pay in fees or generate in returns, depends on their risk appetite and investment strategy."