ESG factors drive more investment decisions



The influence of the environmental, social and governance (ESG) factors have been on the rise when it comes to the investment decision making process, according to the latest annual Legg Mason Global Investment survey.
The study found that 43 per cent of Australian investors were more eager to choose funds and companies based on these principles, while more than a half of investors (55 per cent) said they were trying to avoid businesses with controversial track record.
What is more, the majority of investors (88 per cent) were of the opinion that fund managers should actively police companies they invested in to ensure they acted responsibly.
According to Australian managing director Legg Mason, Andy Sowerby, the research highlighted that a lack of information, understanding or advice was the main barrier to investing more into ESG, with 56 per cent of Australian investors being of that opinion.
Following this, this rate was higher for millennials (67 per cent) versus baby boomers (48 per cent) and advised investors (61 per vent) “They are equally likely as Baby Boomers to feel fund managers should consider a company’s effect on their local community (28 per cent versus 24 per cent) but more likely to feel they should consider diversity of workforce (35 per cent versus 16 per cent),” he said.
“Companies need to take note of the greater scrutiny placed on them by consumers and investors. For instance, investors are most likely to avoid businesses with a controversial track record (55 per cent), to buy from businesses with a good social responsibility record (49 per cent) and to buy from local businesses rather than those that transport over long distances (56 per cent),” he said.
Recommended for you
With wealth managers and advisers having minimal capacity for fund research, a BNY report has found simple alternatives strategies from established providers are those which resonate best with that audience.
Platinum Asset Management has seen its third major client withdrawal this year, flagging a large client will redeem $580 million by November.
ETF provider BlackRock has redefined its underlying investment strategy for the iShares Future Tech Innovators ETF and almost halved the management fees as it continues its local iShares product suite review.
Natixis affiliate IML has launched an active ETF aimed at retirees and income-focused investors, while Loftus Peak has unveiled a hedged version of its Global Disruption ETF.