|
|
Socially Responsible Investments - UKProduct Type: Market Research ReportPublished by: Mintel International Group Ltd. Published: January 2004 Product Code: R560-998 Description While Mintel last reported on the market in 'Ethical and Technology Investments' in December 2001, this updated report is firmly focused upon the ethical side of investments. It looks at the general macroeconomic climate and the factors impacting upon the investment markets overall, as well as the value of investments within the UK. Focusing more on socially responsible investments SRIs, the report also details the social trends that have created a growing number of more socially aware investors, and the performance of those products tailored to this segment of the market.
While more visible than ever before, SRIs are still undoubtedly a niche market. In the Advertising and Promotion section of this report, Mintel looks at ways in which providers have been looking to grow the market. Further insight into ways in which consumers can be tempted into investing in SRIs can be found in The Consumer section of this report, in which the results of Mintel's exclusive research are detailed. Finally, the potential developments in the market are detailed, alongside a forecast of the growth of the market over the coming five years. Table of Contents Introduction and Abbreviations Global information and research Consumer research ACORN Executive Summary Ethical concerns come to the fore Equity-based investments suffer in the early 2000s Can an economic case be made for ethical investments? Changes in the marketplace increase the credibility of SRIs Value of ethical funds under management increases in 2003 A growing range of options for the ethical investor Intermediaries key to product distribution Less than a third of adults have equity investments Child labour and corrupt governments of most concern to consumers Performance and costs both key issues State of stock markets key to the future of SRIs Background and Definitions A growing suspicion of unfettered capitalism... ...and a chance to make a difference Encouragement or punishment? The ethical investor can choose from a variety of 'shades' of green Market Factors Savings fail to keep pace with rising incomes Figure 1: Total PDI, consumer expenditure, savings and the savings ratio, at constant 1998 prices, 1998-2007 Consumers becoming less bullish... Figure 2: Changes in consumer confidence, by income band, October 2001-October 2003 ...but higher earners are relatively positive Two in five plan to save in a deposit account Figure 3: Future saving and investment decisions, September 2002-September 2003 Low interest rates offer slim pickings for savers... Figure 4: Bank of England base rate, January 1992-November 2003 ...but boost the housing market Stockmarket falls hit investors hard... Figure 5: FTSE All Share and FTSE 100 indices, 1995-2003 ...and sales of ISAs reflect market difficulties Figure 6: Equity ISA subscriptions, 1999/2000-2002/03 Arguing the economic case for high ethical standards Research suggests that ethics can pay Launch of FTSE4Good increases awareness... ...but some have issues with the selection criteria FTSE4Good indices broadly follow global trends Figure 7: Performance of the FTSE4Good indices, November 2002-September 2003 Institutional SRI on the increase The rise of the pressure groups Islam the second-largest religion in the UK... ...but not the only faith group with specific investment requirements 'Socially irresponsible investments' - a hedge against recession? Market Size Household sector moves away from equities Figure 8: Value and type of stocks held, household sector, 1996-2003 Retail sales of collective investments stagnate Figure 9: Retail sales of unit trusts and OEICs, 1999-2003 £2.3 billion held in ethical unit trusts and OEICs in October 2003... Figure 10: Value of ethical investments held in OEICs/unit trusts, 1998-2003 ...but they fail to significantly increase market share Ethical bank accounts offer an option for the risk-averse Products and Providers Deposit and savings accounts provide a secure base for investors Smaller specialists offer a different approach ISIS Stewardship remains the UK's largest ethical unit trust Figure 11: Leading ethical unit trusts/OEICs, October 2003 Fund profiles ISIS Framlington Scottish Widows Jupiter Unit Trust Managers Distribution and Promotion An IFA-dominated market... Figure 12: Gross new retail sales of unit trusts and OEICs, by distribution channel, October 2003 ...but ISA sales follow a different pattern Figure 13: Gross new ISA sales of unit trusts and OEICs, by distribution channel, October 2003 A range of specialist organisations serve the SRI market Barchester Green Ethical Investors Group EIRIS Advertising expenditure falls across the investment industry... ...but particularly so among SRI providers The Consumer Seven in ten have some sort of cash savings Figure 14: Ownership of selected investment products, by gender and socio-economic group, December 2003 Equity ownership concentrated among the most affluent Investment holdings peak among the middle-aged Figure 15: Ownership of selected investment products, by age group, December 2003 Thriving neighbourhoods key target for investment providers Figure 16: Ownership of selected investment products, by ACORN category, December 2003 Broadsheet readers hold the widest range of investment products Figure 17: Ownership of selected investment products, by media usage, December 2003 More than a quarter of third agers hold a stocks and shares ISA Figure 18: Ownership of selected investment products, by lifestage, December 2003 Scots and Southerners have high levels of investment ownership Figure 19: Ownership of selected investment products, by television region, December 2003 Is there a role for television advertising in the investment market? Figure 20: Ownership of selected investment products, by supermarket usage and commercial television viewing, December 2003 Consumers give a qualified 'yes' to ethical investments Figure 21: Willingness to purchase ethical investments, December 2003 Young and idealistic? Figure 22: Willingness to purchase ethical investments, by gender, age and socio-economic group, December 2003 Affluent pre-/no family respondents most interested in SRIs Figure 23: Willingness to purchase ethical investments, by lifestage and Mintel's Special Groups, December 2003 Three fifths of broadsheet readers would consider making an ethical investment Figure 24: Willingness to purchase ethical investments, by ACORN category and media usage, December 2003 Further evidence for the unsuitability of mass-market advertising Figure 25: Willingness to purchase ethical investments, by supermarket usage and commercial television viewing, December 2003 Child labour, corrupt governments and the arms trade are key concerns Figure 26: Key areas of ethical concern when making investment decisions, by age group, Dec-03 Ethical concerns fairly constant between genders and socio-economic groups Figure 27: Key areas of ethical concern when making investment decisions, by gender and socio-economic group, December 2003 Avid television viewers express fewer areas of concern Figure 28: Key areas of ethical concern when making investment decisions, by supermarket usage and commercial television viewing, December 2003 Priorities very different among potential ethical investors Figure 29: Key areas of ethical concern when making investment decisions among potential ethical investors, December 2003 Suspicions exist over the performance of SRIs Figure 30: Perceived impact of ethical investment criteria upon fund performance, by gender, age and socio-economic group, December 2003 Key investor groups most concerned over the performance of ethical funds Figure 31: Perceived impact of ethical investment criteria upon fund performance, by lifestage, Mintel's Special Groups and media usage, December 2003 Occasional viewers of commercial television least convinced that ethical investments will underperform Figure 32: Perceived impact of ethical investment criteria upon fund performance, by supermarket usage and commercial television viewing, December 2003 55 Potential investors recognise the risk of underperformance Figure 33: Perceived impact of ethical investment criteria upon fund performance, by willingness to invest in ethical funds, December 2003 Confusion as to how to purchase ethical investments Figure 34: Attitudes towards ethical investments, by age group, December 2003 Affluent consumers tend to believe that ethical investments can make a difference Figure 35: Attitudes towards ethical investments, by gender and socio-economic group, December 2003 Sainsbury's shoppers again show their faith in SRIs Figure 36: Attitudes towards ethical investments, by supermarket usage and commercial television viewing, December 2003 Guidance needed for potential investors Figure 37: Attitudes towards ethical investments, by willingess to invest in ethical funds, December 2003 The Future A sustained market rally required before investor confidence returns... ...but ethical funds may be ideally suited to a rising market Tension over changes in environmental and social legislation Moves to increase social and environmental accountability of companies Decreasing loyalty in the banking market could see the Co-operative Bank profit Forecast Positive growth Figure 38: Forecast value of ethical investments held in OEICs/unit trusts, 2003-07 Real growth opportunities exist Increasing profitability will drive future sales Factors incorporated Appendix: Research Methodology |
|
||||||||
MindBranch has been the leading provider of industry and investment research from more than 550 independent research firms since 1992. With over 90,000 market research reports, MindBranch is your trusted source of competitive business intelligence. |