Wealthy People in U.S. Lag Their Peers Overseas in Sustainable Investing

A small portion of wealthy investors in the United States pursue sustainable investing strategies compared with their global peers, according to a recent survey.

Only 12 percent of U.S. investors have at least 1 percent of their portfolio in sustainable investments, compared with 39 percent of wealthy investors internationally. The results were based on a survey of 5,300 high-net-worth investors by the financial-services company UBS. The survey defined high net worth as an investor with at least $1 million in investable assets.

A key reason Americans are holding back: More than three-quarters without sustainable investments said it is difficult to quantify their impact.

Although U.S. investors were less likely to make sustainable investments, those who did put a larger percentage of their portfolio than others around the world into this type of investment. Americans involved in sustainable investing committed 49 percent of their holdings to such investments compared with the global average of 39 percent.

The study defined sustainable investing as an investment strategy that integrates society concerns, personal values, or an institutional mission into allocation decisions. Examples provided include impact investing, in which investors seek measurable environmental or social impact; the integration of environmental, social, or corporate governance considerations into a broader portfolio; and avoiding certain industries that conflict with an investor’s values.

Chinese investors were most inclined to invest with mission in mind. Sixty percent made sustainable investments, with an average allocation of nearly half their portfolio dedicated to impact.