Guide to ESG

There is no doubt that the integration of environmental, social, and governance (ESG) investing is here to stay. General media coverage on the subject has exponentially increased in the last few years in Australia and this year’s UN Climate Change Conference (COP26) has had far more cover-age than ever before.

As mentioned in this Money Management Guide to ESG, Australian investors are increasingly demanding more from their investments and governments in light of climate change and technological acceleration.

However, funds that are able to use the Responsible Investment Association Australasia label to display their focus for ESG and responsible investing are often still investing in companies that expand fossil fuels and are incompatible with the net zero by 2050 pathway.

Not only this, they are failing to vote in favour of numerous climate-related resolutions and cite engagement with those firms as a reason. Additionally, they are failing to demonstrate that engagement is making any progress.

This kind of rhetoric and approach will need to change if the world truly wants to move to net zero by 2050 as investors are now more seriously pushing for this.

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Advisers are already asking clients about investing ethically or including ESG factors but that may be a thing of the past as failing to consider climate change policy could affect a client’s best financial interests.

It does not matter whether one believes in climate change as what is clear is that ESG is becoming part of successful investing.

I hope you find this year’s Guide to ESG informative and useful.

Click here to download as a pdf