Research Report
E.S.G. Legislative Basic Study(V): Survey on E.S.G. Investments by individual investors and its Implications
I. Background and Purpose of Research
▶ Recent spread of E.S.G. discourse and increased interest among investors in the corporate world, capital market, and academia
○ Since the emergence of E.S.G. discourse from the perspective of sustainability in the UN Global Compact report in the mid-2000s, E.S.G. discourse has spread rapidly.
○ As various discussions on institutionalization of E.S.G. have been raised in the capital market, such as E.S.G. investment, E.S.G. management, responsible investment, sustainable investment, E.S.G. disclosure, etc., investors' awareness and interest in E.S.G. are increasing.
- In particular, individual investors' interest in E.S.G. elements and E.S.G. investment will likely increase, but their awareness is expected to vary depending on asset size, investment purpose, and interest in E.S.G.
▶ Individual investors' interest in E.S.G. and E.S.G. Need for quantitative survey and analysis on awareness of investment, etc.
○ Conducting a survey on interest in E.S.G. and awareness of E.S.G. investment among individual investors active in the Korean capital market
- Analysis of individual investors' awareness of E.S.G., interest in E.S.G. investment, investment priorities, collection of information related to E.S.G. investment, and expectations on sustainability of public companies
-Through this survey, analyzing awareness and interest in E.S.G. investment among Korean individual investors, comparative analysis with the investment tendencies of global individual investors was conducted, and implications for institutional improvement to promote E.S.G. investment in Korea were derived.
Ⅱ. Contents
▶ Survey design: Analysis of awareness and interest in E.S.G. investment among 1,000 individual investors investing in the domestic stock market
○ Analysis of recent overseas E.S.G. related to individual investors Referring to the survey case, the standard for domestic individual investors was set at 20 million won in investment amount
○ Structured to collect responses from various individual investors based on region, gender, age group, education and income level, investment scale, etc.
▶ Analysis of main survey results
○ Investment period and interest
- Investments are maintained for an average of 6 years and 6 months, and long-term investment (48.4%) is mainly preferred
- 55% of respondents answered that they are interested in E.S.G. investment
* The higher the annual income and education level, the higher the interest in E.S.G. investment
○ E.S.G. Investment Information and Investor Awareness
- 77.1% of respondents were aware of the term 'sustainability', and awareness of terms related to social responsibility such as E.S.G. (48.5%) and fair trade (63.8%) was considerably high.
- E.S.G. is no longer a new concept, suggesting that many investors are aware of this.
○ Awareness of the importance of E.S.G. factors other than investment performance
-68.7% of respondents responded that in addition to returns, a company's E.S.G. activities, sustainability, and transparency should be considered when investing.
- 44.9% of respondents responded that they consider E.S.G. activities as consumers when purchasing a company's products, indicating that companies' E.S.G. Management can be a key element of investment
○ Investor awareness of the role and responsibility of companies in solving social problems
- ‘Climate change response and carbon neutrality through greenhouse gas reduction' was the highest at 63.8% as a social issue that companies should respond actively
-Anti-corruption and compliance with laws and regulations, and securing industrial safety showed high response rates
○ Changes in interest in E.S.G. investment
- 31.2% of respondents answered that their understanding and interest in E.S.G. investment have increased over the past two years
- In particular, the interest in E.S.G. investment increased among those with higher education levels and higher incomes, suggesting that E.S.G. investment is becoming a long-term investment strategy beyond a short-term trend
Ⅲ. Expected Effects
▶ Provide data that can contribute to forming an institutional foundation for activating sustainable E.S.G. investment through a survey on individual investors' awareness of E.S.G.
○ E.S.G. Contribute to creating a sustainable investment environment in the capital market by designing a disclosure system for investment activation, developing various E.S.G.-related financial products that can be utilized by individual investors, and training and educating experts