Maria Loyez

Australians are increasingly turning to responsible investing, with 88% expressing a desire for their superannuation and other investments to be invested ethically, up from 83% in 2022, according to the latest report by the Responsible Investment Association Australasia (RIAA).

The report, From Values to Riches 2024: Charting consumer demand for responsible investing in Australia, highlights a growing shift towards sustainability and social responsibility with 76% of Australian’s saying they’d consider moving their money to another provider if their current fund didn’t align with their values.

“We can see that Australians are keen to invest in line with their values and delighted that this long-term trend continues, however the discrepancy between Australians’ desire to invest ethically and the reality of where their money is invested is concerning. This fact is not lost on consumers,” said Australian Ethical Chief Customer Officer Maria Loyez.

With 78% of people saying they’re concerned about greenwashing, the report reveals a lack of confidence in identifying truly ethical financial products and this risks causing inertia.  This paradox underscores the pressing need for greater transparency around responsible investment products in the market.

“It’s not at all surprising to see this significant demand for responsible and ethical investments among Australians. This report highlights not only a growing awareness of the impact of our financial choices but also a clear call for action from the industry. As consumers seek more transparency and alignment with their values, it’s crucial for financial institutions to step up and offer a wider range of responsible investment options, backed up by robust processes and third-party verification,” said RIAA co-CEO Estelle Parker.

Of the top seven ethical concerns Australians have about where their money is being invested, animal cruelty tops the list with 66% of respondents saying they want to avoid it, followed closely by human rights abuses at 60%.

Other investments Australians want to avoid are companies whose operations include gambling (56%), tobacco (55%), weapons and firearms (55%), tax avoidance (55%), and non-medical animal testing (54%). These concerns underscore the growing importance of financial products being transparent about the extent to which they truly align with their customers’ values and ethical principles.

“Despite animal cruelty being the top issue for consumers in the report only 11% of Australia’s superannuation and investment sector is invested in funds that screen out investments in companies that conduct animal testing. Australian Ethical doesn’t invest in companies that use animal research for cosmetic purposes and for healthcare purposes where we assess they are not meeting minimum expectations, and forms one of our strategic areas of focus for stewardship.” said Ms Loyez.

“We think it’s critically important that Australians have confidence in their investments, because not all so-called ESG funds are created equally. The industry needs to offer greater transparency if we are to gain the trust of investors who genuinely want to see their investments do good in the world.”

Only 5% of Australians reported having negative perceptions towards responsible investing, with only 5% now rejecting it outright, down from 9% in 2022. Additionally, some 65% of respondents say they would be willing to invest more if their funds contribute to a better world.

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