We start by discussing what motivates investors to enter the sustainability field (section 11.2). We debate different reasons for their engagement, ranging from concerns for securing competitive returns to changes in the regulatory landscape and client demand. Next, we discuss how ESG factors are integrated into different asset classes. We first discuss how ESG considerations are integrated into equity investing (section 11.3). We then look at other ways to consider ESG-related information in investment decisions, focusing on impact investing and fixed income (section 11.4). Section 11.5 looks at how investors that already have invested in companies can improve these firms’ ESG performance, either via active engagement and dialogue or via voting on shareholder resolutions. Next, we discuss what different kinds of data can shape investors’ consideration of sustainability issues (section 11.6). Finally, we look at the new European legislation (Sustainable Finance Disclosure Regulation, SFDR) which requires investors to disclose the level of sustainability risks and adverse sustainability impacts associated with their investment decisions.

Recent research across European countries indicates that a large majority of individual investors – between 60% and 75%, depending on how the questions are framed – want to invest sustainably. Consumers say that they are willing to give up return for environmental outcomes: a recent survey of German and French retail investors suggests that 64% would accept a sacrifice of -5% on their pension benefits. In this context, the €97 trillion question is obviously why most of them still invest in non-sustainable investment products. This chapter is an attempt to answer that question, with a focus on upcoming EU regulations such as the Ecolabel for financial products. Covering the results from our upcoming research reports, we cover issues including consumers’ sustainability objectives, mis-selling of financial products, lack of voting rights on sustainability issues, environmental impact claims and deceptive green marketing. We describe the main issues with the European policy response, and how they may end up amplifying existing problems – by creating confusion in relation to how green financial products are understood and how to deal with the expectations of impact-focused consumers.