Differentiation needed between generations for ESG products

There is a great opportunity for fund managers to provide products which differentiate on environmental, social and governance (ESG) grounds which would help stem greenwashing fears.

Speaking at the Responsible Investment Association of Australasia (RIAA) in Sydney, Zsuzsa Banhalmi-Zakar, manager of research at RIAA, said she was concerned at the lack of product differentiation in the market.

“Consumers aren’t dumb, they react to the bushfires, they react to climate change, we know what issues they are talking about,” she said.

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“But there are differences between generations, millennials are concerned about zero waste and the circular economy and they weren’t even top five concerns for baby boomers. Baby boomers are concerned about tobacco and pornography.

“I don’t see these differences reflected in products, there is no differentiation even among genders. Why are there no funds aimed at the things women are concerned about? This is a great opportunity for firms to look at their products and the impact/outcome of those.”

She also highlighted a survey by RIAA had found respondents had a “huge concern” about greenwashing and whether funds were achieving their stated goals.

“There is a huge concern, 72% of people are concerned about this and it should be a wake-up call for the sector. They need to do a better job at convincing the public that isn’t what we do.

“Being bad at outcomes is fuelling this view as funds give targets but then aren’t achieving these.”

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