Wealthy Europeans increase sustainable investment

Sustainable investing among Europe's high net worth community has increased 35% in the past two years, according to a survey released by the European Sustainable Investment Forum (Eurosif) on 7 September.

The study revealed that HNW individuals have approximately €729 billion in sustainable investments, which represents an average of 11% of wealthy Europeans' portfolios at the end of 2009. This shows a 35% increase since the High Net Worth Individuals and Sustainable Investment study was last carried out in 2008, despite a slight decrease in family wealth over the same period.

The report, which is based on a survey of wealth managers and family offices, examines the extent to which wealthy families follow sustainable investment strategies and consider environmental, social and governmental (ESG) issues in their asset allocation and investment decisions.

It found that the increase was not only due to a greater desire to be socially responsible but also the financial benefits of taking an ESG approach to investments. This was reinforced by the fact that less than 10% of those surveyed saw sustainable investment as an alternative to philanthropy.

According to Penny Shepherd, chief executive of UKsif, the UK branch of Eurosif, private banks will have to respond to the growing interest in sustainable investment. "Private banks in the UK are already building their capacity through developing internal skills and drawing on external expertise," she said.

"This is both to respond to existing client demand and anticipated future demand."

Eurosif predicts that the share of sustainable investments in HNW investors' portfolios will increase a further 15% by 2013.

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