Majority of Irish savers unsure of terms ESG and ‘responsible investing’ – survey

The majority of Irish savers don't know what the acronym ESG (environmental, social and governance) stands for and are unsure what "responsible investing" actually means, according to a new survey by the Irish arm of global investment firm Amundi.

The findings highlight a significant gap between what people know about ESG investment and how the financial industry is communicating the concept.

Amundi’s survey of more than 1,000 Irish-based savers found that only 11 per cent of people knew what the commonly used acronym ESG meant, while a significant majority appeared to conflate “responsible investing” with investing cautiously, rather than the incorporation of ESG ethics into the selection and management of investments.

"ESG and responsible investing are two terms that, as an industry, we use all the time, in our literature, in our communications with clients," Graham Fox, head of distribution with Amundi Ireland, said.

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Therefore, “we really need to think about simplifying our message, maybe explaining it a little better, so that the end customer when they see it knows what it means straight away”, he said.

Despite confusion of the over terms, the survey detected a strong appetite on the part of savers for greener investment products.

Some 86 per cent of those with a pension, investment or savings product said they placed an importance on ESG issues even though 82 per cent did not know if their existing products were ESG-friendly.

Half of the respondents said they would be willing to sacrifice up to 10 per cent of their return on investment to help the planet and avoid a climate crisis.

Despite their efforts, the survey suggested financial firms were not closely associated with sustainability in the minds of consumers.

In contrast, discount retailers Lidl and Aldi and energy providers SSE Airtricity and Electric Ireland were among the top brands mentioned when respondents were asked about brands in the Irish market they consider responsible.

Amundi, Europe’s largest asset manager with more than €2 trillion in assets, has been operating in Ireland since 1998 and has a 350-strong workforce here. Dublin is one of its six global investment hubs.

"Issues of the environment and sustainability, as well as the social impact of a company's actions and the operation of the boardroom are of fundamental importance to us as investors, and they are clearly important to Irish people," David Harte, chief executive of Amundi Ireland, said.

“This survey shows that the investment industry needs to do more to explain its activities in this area and the benefits of the products that it offers,” he added.