In our latest edition of the Sustainable Investing Tracker study, we sought to discover how advisers are tackling the tricky and sometimes controversial topic of sustainability reporting. We know from previous studies that this is the area of sustainable investing that advisers feel least confident in.

NextWealth’s latest report shows that sustainability reporting is a nascent issue with only 59% of advisers saying they are able to report the sustainability of investments back to clients, with only a quarter (24%) saying they report to all clients.

Percentage of advisers who provide an assessment/ rating of the sustainability of investments to clients

But how are they doing this reporting I hear you shout from the back of the room! Good question, and one we asked too.

The most common form of reporting is a written commentary, followed by externally generated metrics from asset managers/DFMs or data (see figure below). Most advisers do not use internally generated metrics with only 16% of those who do report on sustainability using this method.

So if you are looking to develop or even start to report the sustainability of investments to clients, our data suggests dipping your toe in with a written commentary and perhaps looking for some external metrics (there are plenty out there) to help  your clients understand the sustainability of their portfolios..

Forms of reporting the sustainability of investments to clients used by advisers