Publication of survey into preferences for sustainable investment by USS members

The academic report of a survey into USS members’ preferences on sustainable investment has now been published https://www.netspar.nl/assets/uploads/Netspar-Design-Paper-228-WEB.pdf

This revealed strong support for sustainable investing.

The report noted that

‘We found strong revealed preferences for sustainable investing. On average, participants allocated over 70% of their endowment to the sustainable fund. In the second step, we examined which characteristics of participants correlated with this behavior. For example, we found that women invest, on average, £57 more in the sustainable fund compared to men. On the other hand, earning £60k or more correlated with investing £44 less in the sustainable fund. Next, we investigated the correlation between the revealed and stated preferences for sustainability. We found a strong positive association between the two … 
Against our initial hypothesis, we found little evidence that the presence of a cheap conventional default option significantly reduced sustainable investing. 
Specifically our study contributes to the growing literature on sustainable investing. Converging evidence in the finance literature indicates that sustainable investing is motivated largely by reasons other than strictly risk-return maximization. ‘

DivestUSS make the following observations:

The research suggests that surveys do show the underlying investment preferences of those participating, and hence a wider survey would give the Trustees reliable information about the desires of the membership 

The survey only covered active members and not deferred or retired members. There is an urgent need for USS to conduct a survey of all members on sustainable investments and specifically on continued investment in fossil fuels and banks fuelling the climate emergency.

The study again highlights the need for members to be informed by USS of the choice available to them in the DC scheme of investing in an ethical fund.