The world's richest investors are betting on investing their money in socially, ethically and environmentally conscious businesses, which is driving the growth of sustainable investments.

In Capgemini's 2020 World Wealth Report, more than a quarter (27%) of High Net Worth People (HNWIs) — that is, all those with available investible assets of $1 million or more — were interested in sustainable products and services. But it did not stop there, in those with an ultra-high net worth (HNWI), that is, with $30 million or more to invest, the figure increased to 40%.

And even more importantly, that interest is turning into action. These investors plan to allocate 41% of their investment portfolio to companies actively pursuing environmental, social and corporate governance (ESG) policies by the end of this year. By the end of 2021, that number will increase to 46%.

What motivates them is that higher returns occur (39%); there is a better understanding of ESG products (29%); and the desire to give back to society (26%). The preferred areas for investing today are environmental risks and climate change (55%); ethical governance systems (54%); and socially conscious business practices (52%).

It should be clarified that the report has studied more than 2,500 HNWI in 21 main wealth markets, between January and February 2020, before the consequences of the coronavirus pandemic. However, Shinichi Tonomura, managing director of Capgemini Financial Services for Asia and Japan, has explained that this interest is likely to be good news for ESG, as higher wealth bands tend to improve the curve within emerging investment opportunities.

In an interview to CNBC Make It, Tonomura said that as awareness of environmental issues increases and more mature products with better financial returns become more available, appetite for ESG products is increasing.

Sustainable investments outperform

Despite the economic downturn we are experiencing due to the pandemic, sustainable investments have weathered the storm reasonably well.

According to this new report, investors who implemented equity investment strategies at ESG this 2020 have exceeded benchmarks by far. Meanwhile, Morningstar has highlighted that 70% of sustainable equity funds posted returns within their group's upper range in the first three months of the year.

A report released last week by JPMorgan explains that the pandemic could be a “major turning point for ESGs.” The survey of its investors with combined assets of more than $13 trillion, revealed that 50% thought that Covid-19 could mark a positive move for ESG momentum in the next three years.

Millennials lead investment

That new momentum could lead to more widespread adoption of sustainable investment products by general investors. Last year, in research by Morgan Stanley, they found that 80% of individual investors were interested in sustainable investments.

Millennial ages 26 to 40 are likely to lead the new trend, according to Tonomura, who also noted that young people tend to be “more aware of sustainability and sustainable consumption.”