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HomeNewsESG Investing and EIS Set For Substantial Growth In 2022

ESG Investing and EIS Set For Substantial Growth In 2022

2021 saw a number of headlines in the world of investment, with major strides being made in markets such as cryptocurrency, mixed with social media driven investment in companies such as GameStop, 2021 was an eventful year for investing. As we approach the end of the year however, with markets reeling and showing an increased level of volatility due to Covid and the recent Omicron variant, the question is what are the investment trends going to be in 2022?
ESG, EIS, sustainability, investment trends, investment
ESG investing saw substantial growth in 2021 and it seems to be ready to emulate this in 2022. The way investors make their decisions has changed permanently over the past few years and has no doubt been accelerated by the pandemic. Global ESG assets are on track to exceed $53 trillion by 2025, representing more than a third of the projected total assets under management, with Europe accounting for half of the current ESG assets. Research from IW Capital supports this trend with it showing that 45% of investors are looking to back green or sustainable firms in 2022 and 42% of investors are looking to back firms that benefit their community.

This shows a clear sign of the increased desire to invest in something which investors will hold a personal connection with, being given the chance to visit their investment into their local community and feel valued when they attend. One prime example of this is IW Capital CEO Luke Davis, who as a resident of Hove, has led a multi-million pound investment and renovation project on the seafront, creating a community hub and world-class entertainment venue known as Rockwater Hove (https://rockwater.uk). Part of this raise was a round open solely to residents which raised over £1 million.

It was a pivotal year for the Enterprise Investment Scheme also, with it being predicted to show equally impressive gains going into 2022. Since its inception in 1993, the Enterprise Investment Scheme has raised over £24 billion in funds for almost 33,000 companies. This trend continued into 2020 with a total of £1.9 billion of investment being raised by 4,215 companies. With over 6 million SMEs in the UK, making up 99.9% of private sector businesses, EIS is an essential tool to accelerate the country’s SME landscape. Providing such pivotal support to the backbone of the economy, if the EIS scheme were given greater muscle to assist startups and scale-ups to traverse the challenges posed by the post-Covid economic arena, it could provide for a boost for the UK economy as a whole.

Whilst there is still uncertainty in the investing world, along with obstacles caused by the Omicron variant, it seems the way investors are choosing their investment has changed and they are increasingly choosing investments which not only benefits their financial gain but also their local community and the environmental impact which their investment has. This seems to be here to stay heading into 2022.

Luke Davis, CEO of IW Capital discusses:

“This past year was certainly a momentous year in the world of investing. The pandemic has had an impact on the UK in ways that we could never have predicted, it has created a new class of investor, one more concerned with the impact their capital is having and the difference it makes to their local area.

“Given the chance, investors are more eager than ever before to make their financial decisions with altruism in mind. That is not say they don’t need good returns, but that if they can, doing good with their money is now a priority and this, I believe will be an important trend throughout 2022.

“Investing has never been more emotionally charged after a year where the social, environmental and medicinal good of companies has been in sharp focus. Individuals now want to back companies that can prove they are beneficial to the local area, either through employment, redevelopment, or community outreach. This comes alongside what the firm is doing on climate change and carbon emissions which is, as ever, increasingly important. 
 
“The EIS could also be an important trend throughout 2022. The EIS can be said to offer a win-win situation for both investors and small businesses – providing SMEs with much-needed investment to provide them with a platform to grow, whilst providing investors with tax reliefs to incentivise this investment. Small businesses and SMEs throughout the UK have benefitted enormously from the EIS in the last 25 years, fuelling growth and job creation at an impressive scale. SMEs are becoming so inventive and versatile with their companies and making sure they are at the forefront of the UK business scene. SMEs are an indispensable part of the UK economy and the outlook for the festive period is a reward for their constant hard work.”

Hernaldo Turrillo
Hernaldo Turrillo is a writer and author specialised in innovation, AI, DLT, SMEs, trading, investing and new trends in technology and business. He has been working for ztudium group since 2017. He is the editor of openbusinesscouncil.org, tradersdna.com, hedgethink.com, and writes regularly for intelligenthq.com, socialmediacouncil.eu. Hernaldo was born in Spain and finally settled in London, United Kingdom, after a few years of personal growth. Hernaldo finished his Journalism bachelor degree in the University of Seville, Spain, and began working as reporter in the newspaper, Europa Sur, writing about Politics and Society. He also worked as community manager and marketing advisor in Los Barrios, Spain. Innovation, technology, politics and economy are his main interests, with special focus on new trends and ethical projects. He enjoys finding himself getting lost in words, explaining what he understands from the world and helping others. Besides a journalist, he is also a thinker and proactive in digital transformation strategies. Knowledge and ideas have no limits.
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