Standard Chartered has found that $8.2trn of investable retail wealth could be funnelled into sustainable investments by 2030 to finance ESG objectives in growth markets.
The capital could be crucial in bridging funding gaps in areas including energy, food security, poverty alleviation, and reaching global net zero carbon.
Retail wealth turning to ESG?
This is according to Standard Chartered’s Sustainable Banking Report 2022: Mobilising retail investor capital.
Furthermore, the report stated that 40% of retail investors across all markets and income brackets consider climate change and carbon emissions a top investment priority.
Mainland China and India had the highest potential for growth in sustainable investing, attributed to their large populations and rising domestic wealth. China alone could move $5.7trn in sustainable retail investment by 2030.
However, retail investors identified barriers to them moving their wealth into ESG and sustainability:
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- Accessibility (48%): investors find it hard to even locate these investment products;
- Perceived low returns/higher risks (47%): nearly half consider it not to be worth their time due to lack of return, which is false, and
- Understanding (47%): more consumer education is needed to help understand the impact of retail wealth moving into sustainable investment and ESG.
Marc Van de Walle, global head, wealth management at Standard Chartered, said: “Individuals have the power to be catalysts for change. Our research shows that $8.2trn of retail investor wealth could flow into sustainable investments if we remove the barriers that are holding them back. The top ESG-related issues across the 10 markets we surveyed – climate change, pollution, poverty, corruption, food scarcity and energy security – correspond to the areas that investors are most interested in addressing. We know that a rapidly growing number of our clients want their investments to make a positive impact on the environment and in society, and there is significant appetite to take ESG investment from a niche play to a mainstream investment strategy. As a bank, we have the expertise and solutions to help investors achieve both profit and purpose. Importantly, we need to enable the shift now for a more sustainable future.”