There is a desire among investors to fight climate change, especially in the face of government inaction, and advisers need to step up their offerings of responsible investment (RI) and ethical products, Australian Ethical believes.
Responding to the Responsible Investment Association of Australia's (RIAA) latest report, Australian Ethical said as the core RI segment grew by 65 per cent in one year and was now worth $51.5 billion, the finance sector needed to get serious about how it responded to climate change.
Australian Ethical managing director, Phil Vernon, said investors were moving their money to asset managers who paid attention to the environment and social impact of their investments.
"Investors want to ensure that asset managers are mindful of minimising the risks that climate change poses to their investments," he said.
Australian Ethical also said issues such as human rights and gambling were also attracting investors.
"We use a negative screen to rule out investments that harm the environment, people or animals, as well as a positive screen to invest in companies that improve them," Vernon said.
"This holistic approach resonates with a growing number of conscious consumers who want to know that their money is being put to good use, in a way that aligns with their values."