Sustainable Investments On The Rise: 44% Of German Households Join The Green Revolution

German Households Embrace Sustainable Investments Despite Information Gaps A deep change in investment behavior has already taken hold in Germany, with 44% of all households already invested in sustainable investment or at least able to imagine such an investment. This corresponds to the growing role of private households in the financing of the green transition in Germany. As KfW Research has been able to find out, this large proportion is made up of 14% of the population already invested in sustainable financial products and another 30% who would like to engage in this type of investment in the future. Products that are therefore available for invest-ment by German households in a sustainable way range from green bank accounts and savings deposits to sustainable funds, even securities, and investments in renewable energy projects. There is hereby a broad palette that reflects the increasing sensitivity and efforts toward environmental sustainability within the financial sector. Despite this openness, however, there is still a lot of skepticism and hesitation among potential investors. The large barrier is considered to be the lacking information about the effectiveness and impact of these green investments. In this respect, according to the Chief Economist at KfW, Fritzi Köhler-Geib, "This survey basically showed that most people in Germany are willing to invest their capital in climate-friendly projects within their personal possibilities.". Moreover, the accessibility of information related to sustainable financial investments needs to be made easier, with a clear indication of how this will contribute to climate action. The study revealed that 32% of households doubt that their money is really invested in supporting climate projects. Another 19% of potential investors do not know enough about the available products, thus also inhibiting the likelihood of them investing in sustainability. Despite these doubts, marginally lower returns are not much of an obstacle. In reality, 86% of all those surveyed are ready to accept lower financial returns if they know their money is being invested in projects supporting sustainable development. There is certainly a generational divide when it comes to attitudes on sustainable investment. Attitudes toward sustainable investment options are very much out of favor with younger adults, particularly between the ages of 18 and 30 years. This demographic is three times more likely to be holders of sustainable funds and securities compared to those over 65, with 15% of younger adults investing in such products versus only 5% of older individuals. This trend crops up in green bank accounts, in which only 7% of young adults take part, as opposed to merely 2% of the older population. This generational interest in sustainable investments underlines that something much more fundamentally cultural is at play—something like estimating environmental impact as equivalent in importance to financial returns. And as Germany charges ahead with its 'grüne' transformation, the role that private households can occupy, at least as investors, becomes of central concern. With appropriate information and a supportive environment, German households could become pivotal contributors to both national and global sustainability goals. According to Köhler-Geib, that is how information gaps are tackled and the creation of a supportive environment for sustainable investing. "Households in Germany form a relevant group of investors for sustainable investments who, in an enabling environment, can play their part to make their contribution towards the transformation of Germany and the world", she said. While the majority of German households are already invested in or at least open to green investments, there are clearly existing barriers. A second major step is the better provision of information and a clearer understanding of green investment impact, serving as a precondition for broadening participation and ensuring these investments are really working for climate action. There is a promising future for sustainable investing in Germany if the young generation takes the lead, but only if certain preconditions and supporting structures are laid to make such a transition possible.