The bushfire emergency was a flashpoint for responsible investing in Australia, with more and more investors taking an interest in what their money was being spent on.
“We saw, through the bushfires, this thriving consciousness around how people thought about their investments and thought about their impacts and what they could potentially be funding,” Leah Willis, head of client relationships at Australian Ethical, told the IMAP Virtual Adviser Roadshow.
“Once we come out of this the world will have changed dramatically, the way we operate will have changed dramatically, but one thing that will still be there is climate as a real consideration.”
Australian Ethical has tracked an increasing consciousness in how people consume – starting at the supermarket, with the arrival of ethically sourced products, and eventually spilling over into investments.
“$980 billion worth of assets professionally managed in Australia now have some kind of green or ESG or ethical or sustainable overlay,” Ms Willis said.
“That’s almost one in two dollars in Australia that’s now being managed in some kind of responsible fashion.”
And while many products already offer screens against tobacco and armaments, investors are increasingly trying to limit their exposure to fossil fuels investments and are more and more interested in human rights.
“Consumers are demanding and wanting different things to what the ESG providers are necessarily providing,” Ms Willis said.
“We as managers need to go further to understand these concerns and be able to address them in portfolios.”
Key to aligning client needs and values with their investments is understanding the different facets of responsible investing – from ESG and ethical investing to impact investing, which Ms Willis said “will be a space to watch” over the next decade.
“How are you going to lead and guide your clients through this widening consciousness around investment?” Ms Willis said.
“And how will you align your recommendations to the positive impacts that clients are expecting to have on their investments to these critical social and climate issues that they’re concerned about?”
Another promotional piece.Please stop it.
The problem with these ethical investments is they have a pretty narrow lense. Is Facebook really that ethical given what they do with peoples data? Are the big banks ethical given the fees for no service scandal?
I find it hilarious when younger clients say they want to be in an “industry” super fund because they’re concerned about the environment. The poor snowflakes look quite shocked when I tell them “industry” funds are controlled by unions, and invest in lots of environmentally unfriendly industries because they employ lots of union members.
Leah, you will be pleased to know I then point them in Australian Ethical’s direction. It does seem to be a “safe space” for them.
I assume you have evidence to back up your claims, or do you use 1 or 2 and claim that is representative of all of them.
You can’t be serious, Leah….this article is fundamentally just another product flog. Another sales pitch based on science and heresay where there is no meaningful and factual evidence to support what you are saying. The climate activists might think that they fooled the community at large on the way into the COVID-19 outbreak, but as sure as the sun rises in the east, they won’t on the way out! Instead of making such outrageous claims about what consumers are thinking, why don’t you have an external, independent organisation survey 100,000 superannuants covering all age demographics including retirees and find out what the people really think?
SPOT on Lance!
Agree, ive never had clients even ask about this, so maybe these so called socially conscious people havent actually got any money to invest, possibly they are mostly students and basket weavers and the like. Maybe pop an article in the local nimbin paper probably pick up a bit of fum there
Lol well you’re a bad adviser… Do you always wait for people to ask? Not exactly meeting your best interest duty there. Everytime I talk with clients about this issue in one form or another they have ideas about what they consider environmentally responsible. Sounds like you need to up your fact finding process.
Lol shut up Lance…