Campden Wealth Report 2021: 70% of Investors with Average $833 Million AUM View Net Zero Economy as the Greatest Commercial Opportunity
22nd September 2021 | Hong Kong
Campden Wealth has released the 2021 Report on Investing for Global Impact: A Power for Good, providing insights into attitudes and actions of the world’s wealthiest individuals, families, family offices, and their foundations when it comes to generating positive impact with their capital. Key findings in the report includes investors, family offices & foundations view private capital is needed to fight climate change with 80% respondents of private wealth holders view climate change is a relevant factor in the decisions they make for their investment portfolio. 70% of the respondents see the transition to a global net zero emissions economy as “the greatest commercial opportunity of our age”. The Campden Wealth Research Report 2021 in its 8th year, is produced by Campden Wealth on behalf of Global Impact Solutions Today (GIST) and Barclays Private Bank. Data was collected from over 300 respondents from 33 countries, with an average of $833 million assets under management and case studies with prominent investors and philanthropists featuring in the report.
“ 70% of Investors with Average $833 Million AUM View Net Zero Economy as the Greatest Commercial Opportunity of our Age “
About Investing for Global Impact: Investing for Global Impact – A Power for Good, now in its eighth year, provides unique insight into the attitudes and actions of the world’s wealthiest individuals, families, family offices, and their foundations when it comes to generating positive impact with their capital. As a leading global benchmark for those interested in impact investing and philanthropy, data for this study was collected from over 300 respondents from 33 countries, with an average of $833 million assets under management. Case studies with prominent investors and philanthropists also feature in the report.
Highlights
- 86% of high net worth individuals, family offices, and foundations believe their private capital will be essential in addressing climate change
- 79% agree that governments’ pandemic stimulus packages should prioritise green investment and the transition to a low carbon economy
- 70% see the transition to a global net zero emissions economy as “the greatest commercial opportunity of our age”
- Wealth holders already active in sustainable investing expect it will constitute, on average, 47% of their portfolios in 2022 and 54% by 2027
Private wealth holders want to play their role to address climate change
The majority (80%) of wealth holders said climate change is a relevant factor in the decisions they make for their investment portfolio, with 67% saying they would like their family portfolio to meet the requirements of the 2°C scenario of the Paris Agreement.
Despite recognising the action required, there is some concern around the public and private sector’s ability to solve climate issues. 8 in 10 (79%) agree that governments’ pandemic stimulus packages should prioritise green investment and the transition to a low carbon economy. Only 50 per cent believe that it is possible to keep global average temperature increase below 2°C.
At the same time, they would like to see governments and wealthier nations doing more. Nine in 10 (89%) believe that governments should do more to meet the Paris Agreement, and 61% have expressed a concern that this year’s United Nations Climate Change Conference (COP26) won’t make sufficient progress to fully address climate change. Similarly, 71% believe that developed countries, in particular, should be increasing their financial commitment to developing countries and to the solutions to avoid climate change.
Transition to net zero presents huge opportunities to invest for change
70% of respondents agree that the transition to net zero has become “the greatest commercial opportunity of our age” as it represents a chance to benefit from the companies and innovations addressing climate change. 30% of global wealth holders are targeting investments that directly support a transition to a low carbon economy, and 24% are seeking to avoid any companies that they assess as major contributors to the issue of climate change.
Almost six in 10 (59%) allocate capital directly to companies, projects, and real assets, while 41% of portfolios invest via an indirect strategy created and run by asset managers and other intermediaries.
Growth in sustainable investing as well as fears of greenwashed assets
Sustainable investing is expected to continue expanding within portfolios. This year’s report reveals almost two thirds of respondents (63%) agree that COVID-19 has made impact investing more appealing. Furthermore, for those already active in sustainable investing, they expect it will account for, on average, 47% of their portfolios by 2022 and 54 per cent by 2027.
Even the respondents who self-identified as only traditional investors, have started to adopt the responsible investing practice of using ESG. In fact, nearly half (48%) of these “traditional” investors say that their portfolios now incorporate ESG considerations.
As private wealth holders make these portfolio transitions, 76% are concerned about making an investment that has been greenwashed. Respondents say they would be most reassured by: robust measurement and reporting (59%), trust in the leadership of the invested company or investment (55%), or a track record of past impact delivery from the company or fund (45%).
Respondents still see room for improvement in terms of accessing high-quality impact investment opportunities and information. The two gaps most frequently highlighted by respondents in finding available impact investing vehicles are lack of a strong financial record (97%) and lack of a strong impact track record (95%).
Dr. Rebecca Gooch, Senior Director of Research at Campden Wealth:
“Sustainable investing is gaining steam among ultra-high net worth investors, and COVID-19 has only acted as an accelerate to that. While many want to use their wealth to combat the climate crisis, they also recognise that the rapidly expanding ‘green industry’ is an incredible investment opportunity. Sustainable investment returns are now successfully competing against those of traditional investments, and evidence of their effectiveness at tackling global challenges is becoming increasingly hard-hitting. In turn, a growing number of private investors are opting in. Given that single family offices alone manage more than $6 trillion in assets worldwide, this is helping to propel the industry forward at a time when sustainable solutions are needed most.”
Gamil de Chadarevian, Founder, Global Impact Solutions Today (GIST):
“It is only through positive, collective action today that we can save our planet and civilisation tomorrow. To generate the required sustainable, transformational, and inclusive paradigm shift, we need a holistic vision and a systemic strategy. Our current social, health and environmental problems can only be mended with dynamic actions and tangible goals. To regenerate our environment, economy and democracy, good intentions alone will not suffice. Prominent families, like those who contributed to the research, have a combination of expertise and capital to play a leading role for the future of our planet.”
Damian Payiatakis, Head of Sustainable and Impact Investing, Barclays Private Bank:
“Climate change is the next, and larger, systemic challenge we have to face globally. It is encouraging that leading global wealth holders are seeking to play a role in this fight. From our conversations, I hear them express both a responsibility and an opportunity to use their capital at this pivotal point.
“While we see heightened awareness, action does not always immediately follow. Moreover, navigating the rapidly growing green investment market is increasingly difficult. So we’re having to work more to help individuals and family offices articulate the impact they want to make; and then find high-quality investments that will actually contribute to the solutions to counter climate change as well as target the returns they want.”
Campden Wealth
Campden Wealth is a family-owned, global membership organisation providing education, research and networking opportunities to families of significant wealth, supporting their critical decisions, helping to achieve enduring success for their enterprises, family offices and preserving their family legacy. The Campden Club is a private, qualified, invitation-only Members Club representing 1,400 multigenerational business owning families and family offices across 39 countries. The Club provides peer networking on a global scale, bespoke connectivity around aligned objectives, shared knowledge & best practices, co-investment opportunities with qualified liquid investors and support for the NXG. Campden Club Members also enjoy privileged access to generational education programs held in collaboration with leading global universities.
Campden Research supplies market insight on key sector issues for its client community and their advisors and suppliers. Through in-depth studies and comprehensive methodologies, Campden Research provides unique proprietary data and analysis based on primary sources. Campden Wealth owns the Institute for Private Investors (IPI), the pre-eminent membership network for private investors in the United States founded in 1991. In 2015 Campden further enhanced its international reach with the establishment of Campden Family Connect PVT. Ltd., a joint venture with the Patni family in Mumbai. www.campdenwealth.com
GIST INITIATIVES Ltd. – Global Impact Solutions Today
GIST is a thought-leader; we bridge the gap between social & business, ideas & practice, and donors & grantees. We work with organisations to adapt business models and philanthropic approaches, to introduce and integrate new perspectives of social impact and to deliver advisory services. We define sustainability and impact as a transformational, innovative, and holistic business model, presently the most sophisticated, that provides a competitive edge, delivers healthy financial returns and mitigates future risks – a force for good.
Philanthropy and impact investing suggest and imply different things to different people. As a think tank on this subject, we explore how family offices, foundations and organisations approach impact investing and philanthropy trends. GIST is the Founding Partner & Lead Sponsor of the annual Report “Investing for Global Impact – A Power for Good”, a leading knowledge platform to broaden understanding, identify trends, and provide a unique peer-to-peer benchmark for individuals, families, family offices, and foundations. GIST and its network support endeavours and charitable initiatives that have potential for long-term, holistic, sustainable impact. At GIST we strictly follow ethical principles. We do not compromise our values, strong purpose, integrity, and credibility. www.gistltd.com
Barclays
Barclays is a British universal bank. We are diversified by business, by different types of customers and clients, and by geography. Our businesses include consumer banking and payments operations around the world, as well as a top-tier, full service, global corporate and investment bank, all of which are supported by our service company which provides technology, operations and functional services across the Group.
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