Q1 Impact Investing Index: war affects investors’ choices

Welcome to the Inyova Impact Investing Index for the first quarter of 2022. This index gives you insights on the issues and companies most important to the impact investors in our community. In Q1, we saw significant changes in people’s investment choices. In this article, we’ll take a closer look at what the data shows.

Key takeaways:

• In Q1, impact investors were less selective about what types of investments were included or excluded from their investment strategy. Most likely, this was a reflection of the invasion of Ukraine, and the sense of uncertainty war creates.*
• In particular, there was a notable drop in impact investors selecting exclusion criteria. Most interestingly – fewer people chose to have 'no weapons' and 'no coal' in their investment strategy. This reflects a growing debate around whether such investments are a “necessary evil” to defend against Russia and also reduce reliance on its energy.
• In saying this, the vast majority of our community continue to want these investments excluded from their strategy. And by the way – weapons manufacturers are always excluded from all Inyova strategies. The 'no weapons' criteria removes companies with indirect ties to the industry. 
• The least popular impact topic in Q1 was ‘No alcohol’. Just 24% of impact investors excluded alcohol companies from their investment. 

* Your Inyova investment is always designed to generate market returns in the long-term, regardless of how many impact topics you choose.

Key takeaways:

• Renewable energy is our most popular impact topic, but it is less popular amongst the age 60+ cohort.
• On the other hand, 'no nuclear' continues to be significantly more important to older impact investors.
• Gender equality was significantly more important to the 30-60 year old group. This may reflect the growing importance of this topic amongst people in their mid-career, where the "glass ceiling" becomes more apparent.
• Generally the youngest and middle cohorts made similar choices. Plant-based food and human rights were more important to impact investors below 30 years old. 'No nuclear' and 'no tobacco' were less important to the under 30 group. 
• Other notable differences between the groups were when it came to 'no pesticides' and 'fair pay'.

Key takeaways:

• The ‘decreasing trend’ between 2021 and 2022 is particularly strong when looking at the exclusion criteria of those investing less than CHF 10,000. These impact investors were less likely to want to exclude particular topics from their investment strategy. 
• The biggest differences between each group can be seen in the following topics: transport of the future, advancing education, no nuclear, no weapons, no tobacco, no coal, no pesticides, and no meat. 
• Impact investors with the higher investment amount were more likely to exclude pesticides, coal and weapons from their strategy.

Key takeaways:

• Women were almost 50% more likely to exclude animal testing.
• Significantly fewer women chose 'no nuclear' in Q1 – 51% compared to 60% in the previous quarter.
• Likewise, the percentage of woman impact investors opting for 'no coal' fell from 73% to 67%. Fair pay and advancing education were also chosen less. 
• 81% of men choose 'no coal' in Q1, down from 77% the previous quarter. The drop in 'no nuclear' was less apparent for men, from 47% to 45%.
• The criteria 'no meat' became less important to men. Thirty-two percent of men selected it in Q1, compared to 44% previously.
• Some topics became more popular amongst the male cohort in Q1, including renewable energy, transport of the future, and human rights.
• Amongst women investors, digital champions, transport of the future, and renewable energy increased in popularity, but only by a small amount.

Key takeaways:

• Renewable energy champions remain popular amongst impact investors. Austria's largest electricity provider, Verbund, was a newcomer to the Top 10.
• Plant-based champions dropped out of the Top 10, following a long period of buzz created by Beyond Meat and Oatly.