(Bloomberg) -- A study of investor preferences in Denmark has revealed that women are more willing than men to sacrifice returns to uphold environmental, social and governance goals.
The analysis, which was conducted by Danske Bank A/S unit Danske Invest, showed that 59% of men were ready to invest in companies that ignored sustainability, provided they generated higher returns. Among women, the figure was 41%, Danske said in a report published on Thursday.
The findings shine a light on retail investor preferences in one of the world’s greenest countries. That’s amid concerns that the boom in ESG assets may be out of step with the growing anxiety gripping consumers who are facing higher inflation and the geopolitical uncertainty triggered by Russia’s invasion of Ukraine.
This year, asset managers will need to pay closer attention to retail investors’ ESG views as rules under Europe’s revised Markets in Financial Instruments Directive will require financial advisers to ask clients about their sustainability preferences.
The development follows a landmark rulebook for asset managers that was enforced in Europe early last year -- the Sustainable Finance Disclosure Requirement -- which forces the investment industry to document its ESG allocations.
For now, ESG funds are underperforming. As of Monday, European ESG funds lost an average of 8.9% this year, according to data compiled by Bloomberg, compared with a 7.5% decline in the MSCI World Index.
The Danske Invest survey, which included 2,000 clients, shows that such outcomes are far less likely to sway women from committing to ESG.
“Men are generally more skeptical when it comes to sustainable investments,” said Natalia Setlak, senior strategist at Danske Bank. She points out that 23% of the men surveyed said they thought ESG had a “decidedly negative effect on returns,” compared with just 10% of women who held the same view.
Investing in ESG shouldn’t entail choosing between sustainability and returns, Setlak said.
“There’s no reason to assume that companies with a strong profile within sustainability will perform worse in the future,” she said. “On the contrary, if a company acts responsibly with regard to environmental and social matters, it can be positive for its future business opportunities as many customers are becoming increasingly demanding when it comes to the businesses with which they interact.”
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