Impact Apprehension

We know from behavioural finance that unfamiliar investments are often perceived as more risky.  Impact Apprehension assesses whether investors are worried about sustainable investing because it is new or too complex. 

Outputs:

The assessment places investors into three categories. 

Low	You are relatively comfortable with the notion of sustainable investing. Weaving social and sustainable values into your portfolio does not put you off, even if it means adding novelty or additional complexity.
Medium	You are somewhat apprehensive about sustainable investing. The unfamiliarity, or additional complexity, of weaving social and sustainable values into your portfolio leaves you slightly daunted, but even so you are not completely put off.
High	You are quite apprehensive about sustainable investing. Weaving social and sustainable values into your portfolio represents unfamiliar territory, with which you are not yet fully comfortable. This doesn't mean you should avoid sustainable investing, but you would like more guidance on how this would work in practice.

 

How to use it

Investors with Low Impact Apprehension are likely to be comfortable with sustainable investments where as investors with High Impact Apprehension are likely to feel more concerned. 

Impact Apprehension is combined with Impact Desire to produce an overall ‘Including ESG in your investments’ score. Higher levels of Impact Apprehension will lower the overall recommended allocation to responsible investments and vice versa.