ESG interest broadens across wider demographic
The common belief that environmental, social and governance (ESG) investing’s popularity is being driven by younger generations including millennials and generation Z is a misconception, according to Pengana.
Associate fund manager for the Pengana WHEB Sustainable Impact Fund, Victoria Maclean, said the hunger for more sustainable ESG-style investments was instead mainstream across investors of all ages.
“The demographics on ESG investing are often misunderstood. In contrast to common perceptions, much of the demand for ESG is being driven by older generations who are increasingly concerned about where they are investing their money,” he said.
“There has been a big shift in recent years with investors across all age groups driving the ESG push, not just younger people.”
A Responsible Investment Association Australia (RIAA) consumer report from 2021 showed 86% of Australians expected their super and other investments to be invested responsibly and ethically. The report also showed 62% of respondents believed ethical/responsible super funds outperformed over the long term, compared with just 29% of respondents believing this in 2017.
More financial advisers, who largely served an older demographic, were also seeing interest in ESG.
A recent report by Australian Ethical and Investment Trends revealed almost half of all financial advisers were now providing ESG advice – a big increase from 2016, when only one in five advisers were covering ESG.
The report also found 68% of advisers agreed it was their responsibility to ensure clients’ investments aligned with their values.
“Investors now demand portfolios that help drive positive change in the world around them, or at the very least avoid making things worse,” said Maclean.
Recommended for you
Perpetual has seen AUM rise 6 per cent in the last quarter but the departure of a longstanding JOHCM fund manager led to outflows of $2.2 billion from his strategy.
In the latest Meet the Manager profile, Money Management speaks with Michael Skinner, founder and managing director at Blackwattle Investment Partners.
Global fixed income fund Bentham Global Opportunities has been added to several major platforms, enabling it to be accessed more easily by financial advisers.
Following yesterday’s news about First Sentier Investors closing four investment teams, a second global asset manager has announced it is closing its only dedicated Australian fund.
