ETHICAL INVESTING
“Whether or not people are motivated to seek out sustainable investments, a far more significant number of investors believe that their ethical views should be reflected in how their portfolio is invested”
Yet the average global investor sentiment
towards sustainable investing is essentially misunderstanding, in some cases mistrusting and at best considering it a ‘nice to have’, rather than a fundamental principle for future investing. So what else can we do? I propose we start applying the undervalued art of empathy within the workplace.
Wealth creation A recent study commissioned by Architas found that sustainable investing is neither the end, nor the primary motivation to invest for retail investors. Ultimately, personal financial security remains the central tenet around which wealth creation is framed. While the routes people take to build their wealth are changing, and the ethics surrounding sustainable investing is central to that shift, the latter is still perceived as optional and the benefits underwhelming. Interestingly, in the same study, we saw that whether or not people are motivated to seek out sustainable investments, a far more significant number of investors believe that their ethical views should be reflected in how their portfolio is invested. In other words, when a product can represent our values and ethics on some level, we are far more likely to engage because it helps support the life we aspire to lead. The fact that ethics are incredibly subjective, and emotive, means ethical perspectives are challenging to codify. Moreover, these challenges can be so systemic and wickedly complex, it might feel impossible to design sustainable investment products that genuinely reflect each investor’s standpoint. Not to mention aligning all stakeholders’ viewpoints across the value chain when creating products and services. So, yes, it is hard. But it’s not impossible when businesses open themselves to design empathy.
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Cognitive design Design empathy is an approach that draws upon people’s real-world experiences to address a specific challenge, and it’s a powerful force. Research shows that when we are empathetic, we enhance our ability to receive and process information. Furthermore, putting ourselves in someone else’s shoes causes measurable changes in our cognitive style, increasing our so-called field-dependent thinking. This type of thinking helps us put information in context and pick up contextual cues from the environment, which is essential when seeking to help employees, distributors and investors understand how things relate to one another, both literally and figuratively. Having some degree of empathy and
compassion for others isn’t difficult for most people. However, some of the qualities and behaviours that can make a person successful in business can stand in the way of achieving empathy. People who cannot temporarily let go of their role or status, or set aside their expertise or opinion, will fail to empathise with others who have conflicting thoughts, experiences or mental models. When this happens, it can inadvertently strip away the emotional connectors that our financial products and services desperately need to engage people, particularly with new and unfamiliar concepts. In today’s global financial marketplace, there is an increasing need to apply design empathy across our products, services, and systems to satisfy increasingly diverse users, cultures and environments. Now is the time to practice the art of empathy in the workplace. Now is the time to let that deep, emotional understanding of needs inspire us to create sustainable investment products that offer financial security and help us lead the life we aspire to lead.
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