Gulf families shift to ‘responsible investing’

Gulf families shift to ‘responsible investing’
High-net worth families in the Gulf say that social media and education are changing outlooks between the generations, in turn affecting financial planning. (AFP)
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Updated 25 November 2020

Gulf families shift to ‘responsible investing’

Gulf families shift to ‘responsible investing’
  • Millennials lead the trend to sustainable assets among wealthy, survey finds

LONDON: Rich Gulf family groups are increasingly being coaxed toward more sustainable investing, a survey has found.

Almost three in five (59 percent) older generations of high-net worth families in the GCC say millennials are leading their family toward more sustainable investing, according to a report from Barclays Private Bank.

It found that ESG investing has been brought into wealthy families’ consideration by younger generations, leading to increased family allocations to sustainable assets.

The research, undertaken by global intelligence business Savanta, revealed 58 percent of high-net worth (HNW) individuals of all ages and generations in the Middle East agree that responsible investing is now important to them.

For around four in five of each of the studied age groups, investing responsibly is important to them to some extent, with 81 percent of under 40-year-olds, 77 percent of 41 to 60-year-olds and 86 percent of over 60-year-olds agreeing.

“The report findings reflect that 76 percent of all respondents in the Middle East state that responsible investing is important to their family,” said Rahim Daya, head of private banking at Barclays in the Middle East. 

“This demonstrates that business leaders across the generations are deeply committed to adding value to the societies in which they live.

“While differing life outlooks and values may determine discrepancies in risk investment appetites across the generations, it is encouraging to see that impact investing is a movement that resonates with individuals of all ages.”

Changing attitudes have led to a substantial shift in the way HNW families are investing, the Barclays Private Bank report found.

Around four in five (78 percent) globally and in the Middle East (82 percent), expressed their views on social and environmental responsibility in their investments.

For those who are not already investing this way, 22 percent of the elder generations would like to find out more about their sustainable investment options, and 19 percent are interested in understanding more about investing specifically for positive social and environmental impact.

The GCC-based high-net worth families say that broadly different life values (54 percent), the impact of social media and differing educational backgrounds are also areas that are contributing to different outlooks and priorities between the generations, which in turn affects financial and succession planning.

In contrast to sustainable investing, charitable giving tends to be led by the older generation.

Globally, people over 60 more commonly said that philanthropy was their passion (38 percent) compared to those under 40 (20 percent), but in the majority of families (74 percent), the older generation hands responsibility for managing philanthropic activity to their children.


Environmental, social, and governance

ESG investors look at a company’s environmental, social and governance (ESG) criteria.

France wants end to US-Europe trade spat

France wants end to US-Europe trade spat
Updated 17 January 2021

France wants end to US-Europe trade spat

France wants end to US-Europe trade spat
  • All eyes on President-elect Biden to resolve disputes between partners

PARIS: The EU and the incoming administration of US President-elect Joe Biden should suspend a trade dispute to give themselves time to find common ground, France’s foreign minister said in remarks published on Sunday.

“The issue that’s poisoning everyone is that of the price escalation and taxes on steel, digital technology and Airbus,” Jean-Yves Le Drian told Le Journal du Dimanche in an interview.

He said he hoped the sides could find a way to settle the dispute. “It may take time, but in the meantime, we can always order a moratorium,” he added.

At the end of December the US moved to boost tariffs on French and German aircraft parts in the Boeing-Airbus subsidy dispute, but the bloc decided to hold off on retaliation for now.

The EU is planning to present a World Trade Organization (WTO) reform proposal in February and is willing to consider reforms to restrain the judicial authority of the WTO’s dispute-settlement body.

The US has for years complained that the WTO Appellate Body makes unjustified new trade rules in its decisions and has blocked the appointment of new judges to stop this, rendering the body inoperable.

The Trump administration, which leaves office on Wednesday, had threatened to impose tariffs on French cosmetics, handbags and other goods in retaliation for France’s digital services tax, which it said discriminated against US tech firms.

Overturning decades of free trade consensus was a central part of Trump’s “America First” agenda. In 2018, declaring that “trade wars are good, and easy to win,” he shocked allies by imposing tariffs on imported steel and aluminum from most of the world.

While Trump later dropped tariffs against Australia, Japan, Brazil and South Korea in return for concessions, he kept them in place against more than $7 billion worth of EU metal. The bloc retaliated with tariffs on more than $3 billion worth of US goods, from orange juice and blue jeans to Harley Davidson bikes, and took its case to the WTO.

While Biden promises to be more predictable than Trump, he is not expected to lift the steel tariffs immediately. Even if he wants to, he could run into reluctance from producers in “rust belt” states such as Michigan and Pennsylvania that secured his election win.

Hosuk Lee-Makiyama, director of trade think tank ECIPE, said the US was unlikely to award Europe a “free pass,” noting that countries that had offered concessions to have their tariffs lifted could complain if Europe won better treatment.

Resolving future trade disputes could become easier, if Biden reverses Trump policy that paralyzed the WTO by blocking the appointment of judges to its appellate body.