More Australians are considering ESG factors in their investing decisions

From

Dr Irene Guiamatsia

Leading research firm Investment Trends has released its inaugural ESG Investor Report, the largest scale and deepest dive into the attitudes towards ESG investing among Australian investors.

The consideration of environmental, social and governance (ESG) factors when selecting investments is gaining widespread appeal. According to the latest research from Investment Trends, the majority of Australian investors say they currently apply ESG principles when selecting investments (33%) or intend to do so in the future (45%).

“In the wake of the pandemic, social movements like BLM and ever-frequent environmental concerns like bushfires and droughts, Australians are closely examining how their actions impact the world around them. Increasingly, many are realising how they allocate money plays a vital role in supporting positive initiatives or avoiding harmful outcomes,” said Irene Guiamatsia, Head of Research at Investment Trends.

For investors that already adopt ESG investing principles, preserving the natural environment is an important mission. The most popular initiatives they wish to support through their investment portfolio are renewable energy (70% cite this), reducing carbon emissions (60%) and preventing climate change (55%).

“Australian investors say they already do their part to help the environment in their everyday lives, such as recycle non-biodegradable waste (80%), reduce their energy consumption (74%) and use biodegradable products (61%). Positively, many are also prepared to take a step further by making an impact through their investments,” said Guiamatsia.

There is a common misconception that ESG investing involves a trade-off, where it involves sacrificing returns or higher fees. Yet, current ESG investors are unperturbed in their endeavour to align their portfolio with their values and principles. The majority (81%) believe the long-term performance of ESG investments will be comparable or better than non-ESG equivalents.

“Ultimately, the proof will be in the returns. As we march towards the 2050 target for net zero emissions, climate risk impact and ESG factors will increasingly become material in any well-considered long-term investment strategy,” said Guiamatsia.

“Asset managers, product issuers and service providers all have a role to play in helping Australians better understand how they can align their investments with their own ESG principles.”

About the report

The Investment Trends 2021 ESG Investor Report provides detailed analysis of Australian online investors, examining the attitudes, needs and experience with ESG investing.

Based on a survey of 2,854 investors conducted in February 2021, the Report is among the largest and most comprehensive independent study of the Australian retail ESG investing landscape.

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