The UAE has one of the highest rates of adoption of sustainable investing which hopes to bring about a positive change, according to a new report on High Net Worth Investors (HNWIs) from UBS.
In its “return on values” report, UBS noted that emerging economies such as China (60 percent), Brazil (53 percent) and the UAE (53 percent) have the highest rates of adoption of sustainable investing, far ahead of the United States (12 percent) and UK (20 percent).
The global average stands at 39 percent.
The report noted that UAE investors are very active in philanthropy, with 92 percent saying they believe it is their responsibility to give back and that doing good is more important than having money.
A large majority (80 percent) of the UAE’s wealthy investors said they believe it’s very important to use their time and resources to help create a better world – well above the global average of 65 percent.
As a result, UBS found that 83 percent of investors are “actively aligning” their spending decision with their personal values, compared to 81 percent globally. A total of 76 percent also noted that they are willing to pay higher for products with sustainable practices, compared to 69 percent globally.
When it comes to challenges faced by sustainable investors, 72 percent of investors in the UAE said they consider quantifying impact as the most significant barrier, while 69 percent said that sustainable investment options are not firmly established.
Additionally, a strong perception exists among UAE non-adopters that sustainable investments have higher fees, with 56 percent taking this view.
Notably, 83 percent of UAE investors said they believe returns from sustainable investments will match or surpass traditional investments, compared to 82 percent globally.
“The findings of the study are very encouraging for the future of sustainable investing but it also uncovered some clear barriers that the financial industry can help break,” said Ali Janoudi, the head of wealth management for Central and Eastern Europe, the Middle East and Africa at UBS. “Investors say that they would like to better appraise what impact their sustainable investments will have and need guidance where to find the best partners and options.”
Niels Zilkens, the head of wealth management Arabian Gulf and NRI at UBS, noted that the results indicate that UAE investors are ahead of many of their peers in Europe and Asia with regards to sustainable investment.
“They do not believe they are sacrificing returns, rather they feel that the steps many are now taking will become normal practice in the future,” he said. “The priority in the medium term will be for them to continue feeling able to align their personal priorities with their investment needs.”
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