The Important Role Of The Small Saver In Impact Investing
The world needs help. Climate change with all its effects in the form of heat waves, fires, droughts, floods and all kinds of extreme natural phenomena; economic and social inequalities between countries, further increased as a result of the COVID-19 pandemic; the environment endangered by the depletion of resources, the loss of biodiversity or the accumulation of waste ??
Making the planet a sustainable place requires an urgent change of approach at a global level, new paradigms that allow reorienting human activity, the priorities of states and companies. See more tribunes on sustainability in the Economist Sustainable Investing and ESG.
A few weeks ago, the sixth anniversary of the approval of the Sustainable Development Goals (SDG) was celebrated, the roadmap that the United Nations has set, and which commits all member states, to overcome the main global challenges with a temporary goal set for the year 2030. The existence of a single script for all is essential, as it helps to involve all parties in a common cause.
But it is not enough to raise awareness: to meet the greatest challenge that we have ever had as humanity requires effort, commitment and a lot of money. Specifically, according to experts, it would be necessary to allocate 6 trillion dollars each year until 2030 to meet the SDGs , that is, between 2 and 4 trillion dollars more per year than is currently being allocated.
And where does all that money come from? Governments alone are not capable of assuming such an economic effort , it is evident that it is essential to mobilize private resources and involve the financial system. There is a lot of private capital in the hands of investment funds that support projects that need financing to grow and continue to advance. Entrepreneurs and startups are an example of this. Well, there is no project more important than the great challenge of meeting the 2030 Agenda and making the SDGs a reality.
Supporting economically and helping companies that strive to generate a positive impact on the planet through projects that promote renewable energy, energy efficiency, health or biotechnology, for example, means that we are driving the change that our world needs.
And it is possible to be providing that important contribution to the common good and at the same time making money, which is the objective of any investment. Sustainable investment, or impact investment , is responsible for that, which according to international studies has achieved annual growth of up to 8% in Europe and over 20% in the United States in the last ten years.
In Spain, we are a little behind other countries , due to a large extent to the fact that, in general, we have a lower level of financial literacy, and we maintain a persistent tendency to leave accounts and deposits with large amounts of money that are barely available. reporting profitability. However, there is evidence that impact investing is gaining more and more strength in Spain as well, with the number of entities offering sustainable investment financial products increasing every day.
The problem is that they are normally aimed mainly at large assets, and not so much at the small saver, the one who still has their money in the bank and who, with the right advice, could put it to work for the benefit of the planet.
Thanks to the emergence of new players in the fintech sector , many small and medium savers have become investors. Now, we have to go one step further and help them so that their money can generate a positive social or environmental impact that contributes to a better world.
According to a survey conducted by Micappital among more than 1,200 regular investors with a retail profile, 93% would be interested in investing in products capable of achieving this impact. Even 57% of them would be willing to give up part of their profitability because they know that with their money they are making possible the change that the planet is so desperate for (although investing in sustainable products does not have to be less profitable). But for this they need to feel the security of having someone to guide them, to help them build the right portfolio and make the right decisions at all times.
Advice is essential to grow impact investing among small and medium savers . When you give them the right tools, the response is very positive. An example is our Micappital ECO service, which in its first six months of life made more than 500 people decide to invest part of their assets in financial impact products, and which today already has 3.5 million euros under management.
It is true that it is not much compared to the large wealth managers, but it is the money of many small and medium savers who have convinced themselves that they are also important active agents of change. And in addition, they have achieved an average return of 17% for their savings.