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The rise of sustainable investing

Society is shifting towards a more environmentally conscious way of life and this can also be seen in the world of finance with a rise in sustainable investing. As social and environmental issues become ingrained in people’s mindsets, investors increasingly want their money to make a difference.

Socially responsible investing (SRI) is an investment strategy in which investors consider the environmental, social and governance (ESG) standards of the companies they invest in. As the focus on sustainability has moved firmly into the mainstream, there has been a rapid acceleration in sustainable investing.

At Relative Insight, we’re in the business of language. We wanted to understand the public conversation behind this shift in behaviour so we turned to social media text analysis. Firstly, we gathered social and forum conversations around sustainable investing from 2018 to 2020. Then, we uploaded this data to Relative Insight and used the timestamp to split the data into three groups – 2018, 2019 and 2020. The platform then revealed the unique elements of the SRI discourse in each time period. Here’s what we found:

2018 – a generic discourse

In 2018, the conversation around sustainable investing was beginning to emerge as a public discourse. Language focused on the idea of sustainable investing and investment potential. People looked to forums and social media to source more information on the topic. However, the conversation remained relatively generic. Investing lexicon was 5.2x more likely to appear than in other years, with little mention of sustainability.

2019 – SRI as a tool for combating climate change

In contrast, the 2019 conversation around sustainable investing becomes much more specific. The platform revealed that social media users were 17.6x more likely to discuss SRI as an instrumental act in the fight against climate change. The use of 1st person plural pronouns such as we, we’re and we‘ve depict a collective effort towards sustainability.

In 2019, a key difference in Twitter and forum users’ tone of voice also emerged. They exhibited a sense of urgency discussing the need for sustainable investing to ensure a sustainable future. People feel that socially responsible investment is part of the solution in tackling climate change.

Furthermore, social and forum users expressed their discontent with the progress made by political leaders on the investment front. During the December 2019 election, people clearly looked to politicians to pave the way for sustainability in the new decade. Yet they were left feeling disheartened by a lack of investing in sustainable transport or social initiatives. Emotions of sadness and discontent were 4x more likely to appear during this period.

2020 – Sustainable investing in practice

Fast forward one year and we discovered another fundamental shift in public sentiment. Today, the conversation is no longer focused on what leaders and politicians should be investing in, but personal financial decisions.

In 2020, we saw people doing their due diligence on ESG stocks before investing. Twitter and forum users discussed their research, looking at what sustainable methods and projects companies were developing. They also assessed how businesses were performing in terms of carbon emissions. Furthermore, words that depict wider green issues such as waste, environment and plastic appear 10.6x more in this data set. This shift cements the idea that investors are wary of greenwashing and thus dedicate time to auditing the sustainability practices of companies as a means of protecting their investment.

The 2020 conversation is largely centred around investing in clean energy and green technology. We saw an increase in forum and twitter users calling out companies that invest in fossil fuels. Despite alternative energy sources being a huge focus for scientists and environmentalists over the past two decades, it’s clear that this is now also the case for investors. In fact, A Morgan Stanley study found that millennial investors are almost twice as likely to invest in companies that target social or environmental outcomes.

By using social media text analytics to analyse the public discourse around sustainable investing, we’re able to see what is important for potential investors. On the other hand, social and environmental issues are also becoming more and more important to the everyday consumer. Therefore, it’s essential that brands and organisations communicate their sustainability commitments clearly. As well as developing robust sustainability strategies.

Relative Insight can compare any language asset – from survey results to social listening data and reviews. Request a demo with our team to learn how the platform can help your brand or agency get insights you can’t get anywhere else.

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