According to industry research, Australians are increasingly concerned about whether savings can lead to good or negative consequences, and they are more profitable by investing ethically and responsibly.
Survey (pdf) According to the Responsible Investment Association Australasia (RIAA) released on March 9, four in five Australians (83%) make ethical and responsible investments in pension and bank savings by financial institutions. I was expecting that.
We also found that super-funds that are not involved in environmental damage, human rights abuses, animal cruelty, weapons and tobacco are economically superior to their competitors.
In particular, funds that employ responsible investment practices outperform their peers by 87 basis points in one year and 56 basis points in seven years.
After years of niche markets, ethical investment has become mainstream, Maria Lloyds, chief customer officer of management firm Australian Ethical, told AAP.
However, the market did not have enough financial products to meet the demands of investors.
For example, nearly two-thirds of the Australians surveyed wanted to avoid investments that violated human rights, but only 39% of responsible financial institutions were able to offer products that met this requirement.
Similarly, 67% of respondents who wanted to exclude animal cruelty, testing, and animal products from their super portfolio faced limited options.
The report also warned financial managers in markets with super-savings worth $ 3.5 trillion (US $ 2.55 trillion). Three in four Australians surveyed will consider switching financial institutions if they find that their money is invested in activities that go against them. value.
Millennials (82%) and Generation Z (87%) were far more likely to change investment providers for ethical reasons. These two age groups typically had $ 5,000 to $ 150,000 in superfunds.
Nonetheless, baby boomers (aged 60 and over) living in the capital are least likely to make responsible investments, as 60% say they will not or will not consider it at all in the foreseeable future. rice field.
Most consumers also had a clear idea of which financial product to invest responsibly.
RIAA CEO Simon O’Connor said for the first time that responsible investment outweighed return on investment, which is the number one expectation Australians currently have for financial advisors.
For 70% of Australians, aging was a top priority for responsible investment, followed by savings of 54% and 50% in savings and stocks, respectively.
Loyez said the report shows that investors want to make investment decisions not only to mitigate risk, but also to eliminate “troublesome” ones.
“ESG (focusing on environmental, social and governance risk factors) is a good start, but people want to invest in line with their values.
“Many ESG portfolios that claim to be sustainable are still invested in legacy fossil fuel economies.”
In addition, more investors were thinking not only about environmental issues, but also about social issues such as health, local economy, and community infrastructure.
Most survey participants considered renewable energy and energy efficiency to be the top environmental themes, but 35% said they would refrain from investing in fossil fuels.
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Alfred Bui is a Melbourne-based Australian reporter with a focus on local and business news. He is a former small business owner and holds two master’s degrees in business and business law. Contact him at [email protected]