A comprehensive survey finds considerable interest in sustainable investing in the market.

The Schroders Global Investor Study 2018, which surveyed more than 22,000 investors in 30 markets, including 550 Hong Kong investors, showed that 82% of Hong Kong investors felt sustainable investing has become more important to them. 61% of Hong Kong people have increased their allocation to sustainable investments in the past five years. On average, sustainable investments represented a quarter (25%) of investment portfolios of Hong Kong investors.

Interestingly, survey results suggested interest in sustainable investing was particularly pronounced amongst experienced investors. Hong Kong investors who felt they have higher levels of investment knowledge appeared to realise the benefit as they invested more of their total portfolio in sustainable investments.

Hong Kong people who considered themselves expert/advanced investors said they were investing an average of 28% of their portfolio in sustainable investments. That compared with 19% for those Hong Kong people who considered themselves beginner investors.

Compared to five years ago, 83% of expert/advanced investors in Hong Kong said sustainable investing has become more important and 64% of them have increased their investments in sustainable investment funds. In contrast, only 77% of beginner investors had the same view and 53% of them increased their sustainable investment. It suggested that experienced investors better understand the benefit of integrating sustainability into their investment portfolio.

Some commentators speculate whether the deviation in preference between experienced and less experienced investors comes down to the understanding of sustainable investing? Indeed, research findings suggest mixed understanding.

When they were being asked which phrases describe what "sustainable investing" is:

- Over half (58%) identified sustainable investing as "investing in companies that are likely to be more profitable because they are proactive in preparing for environmental and social changes".

- Slightly less than half (46%) answered with "investing in companies because they are best-in-class when it comes to environmental or social issues or how the company is managed".

- A third (32%) chose "investing that specifically avoids controversial companies, such as alcohol, tobacco or weapons manufacturing".

Only one-in-nine (11%) Hong Kong investors showed a comprehensive understanding on sustainable investing and selected all three answers. Therefore, it appears there are still many investors who may not fully understand sustainable investing, and some analysts consider this lack of understanding could inhibit achieving long-term value and generating better returns.