According to the survey, 37% of investors have heard nothing about sustainable investing, while 38% have heard only a little. Sustainable investing has made few inroads into retirement plans. Among employed investors with a 401(k), just 4% have heard about sustainable investing through their employer’s 401(k) program.
Wells Fargo said the reason is that relatively few U.S. investors report hearing about sustainable investing from a financial professional, family members or friends, or through the media.
That is despite the resources companies and investors have committed to sustainable investing, as measured by the ESG—environmental, social and governance—factors that usually don’t show up in traditional financial metrics. For example, Larry Fink, BlackRock’s CEO, urged companies this year to begin making disclosures consistent with the Sustainability Accounting Standards Board (SASB) and the Task Force on Climate-related Financial Disclosures guidelines.
Recently, a Morningstar study showed that nearly 500 funds added ESG criteria to their prospectuses in 2019, while the universe of dedicated sustainable funds grew to 303 open-end and exchange-traded funds in 2019, up from 270 the year before.“The consumer demand we see today for sustainable investing is just the tip of a potential iceberg,” Tracie McMillion, head of global asset allocation strategy for Wells Fargo Investment Institute, said in a statement.
The survey was conducted online from February 10 to February 16, a month before the World Health Organization declared the coronavirus outbreak a pandemic.
Many observers believe the coronavirus crisis will stoke interest in corporate social responsibility and sustainable investing. “The crisis right now is accelerating all the thinking about how companies affect people and families and communities and the environment,” JUST Capital CEO Martin Whittaker said in an interview with Barron’s. “There will be a backlash potentially against companies that didn’t step up and look after their stakeholders.”