“Sustainable Investing Has Become Mainstream.”

If one defines securities broadly – taking into account not only equities, but also bonds, debt instruments, or gold – Switzerland sits in the upper midrange of Western countries. If one considers equities only, we fare somewhat worse. From that perspective, I tend to see the glass more as half empty than half full.

The fact that barely half invest their money – and that during a low-interest phase – is suboptimal not only for their own wallets. And from an economic perspective, too, it would be desirable for more people to participate in the financial market. The gap between men and women is especially clear: Only 41% of women have securities, while the figure is 58% of men.

If you look at just those people whose entire portfolio consists of sustainable investments, then the figure is around 4%, definitely still in the niche zone. But 33% of respondents have at least some degree of sustainable investment. And 43% of respondents are interested in sustainable investing. That indicates that sustainability has reached mainstream.

The market has developed very dynamically in the last five years. Although growth has slowed over the last one or two years, it still remains a growth market. In Switzerland, a disproportionate amount of new money continues to flow into sustainable products.

It has less to do with assets than it does with age. Older generations show a somewhat lesser ESG appetite than with younger generations. But younger people have lower incomes and fewer assets.

There are certain differences, but they are very minor. I wouldn’t say there’s a gulf between the sexes. Nor is there a any kind of ethnic divide between the French-, German-, or Italian-speaking parts of Switzerland?

We expect the environment to be a winner. But, in fact, all three are weighted similarly – with the focus on social concerns given even slightly more weight: for example, human rights, fair working conditions, and anti-poverty initiatives.

Financial skills are a vital factor in determining whether or not a person invests in securities, but not necessarily whether a person invests in sustainability or not. More decisive for investing in sustainable assets are personal values and the conviction that one’s own actions can indeed have an impact.

Some 37% of people who own securities invest sustainably. But only about 30% of them know how sustainability is measured in the first place. Terms like ESG or Sustainable Development Goals – SDGs for short – remain relatively unknown. This shows not only is financial literacy low – sustainable financial literacy is even lower. 

That’s not so easy to answer. I assume that for the most part it has to do with the different customer demographics. Regional banks have an older customer base, on average. And older people, as mentioned earlier, are less engaged by the topic of sustainability. Moreover, the topic resonates more with people living in urban areas than those living in more rural areas – and regional banks are often present in more rural areas.

We’ll see. It’s clear that the topic will garner more attention during the investment process. Customers will be made more aware, which is an important first step. I expect to see an effect, but remains unclear how big it will be.

It’s about orientation: people with a positive attitude need to see that their investment is actually having an impact. With consistent, intelligible, and nuanced communication – supported by clear metrics, impact reports, and credible labels. Banks have to demonstrate that sustainable investments don’t just make you feel good, they also have a measurable impact.

Advisory services play an important role. If the financial services provider recommends sustainable investments exclusively, with the possibility to opt out of sustainable investments, the share of investors in sustainability increases. 

That really has an effect. We tested the opt-out scenario in our study. The result: 83% of respondents said they would at least partially invest sustainably. Many simply want to avoid making a mistake, and therefore follow their bank’s recommendation.

I’m convinced that sustainability will continue to gain relevance in many portfolios and – even if there’s some headwind at the moment. The share of sustainable investing will increase – the only question is how quickly.