Higher fees no barrier to Australian ESG investors

Higher cost is not a significant barrier to Australians embracing environmental, social and governance (ESG) investing, according to new research conducted by Investment Trends.

The inaugural ESG Investor Report produced by Investment Trends has revealed that the majority of Australian investors already apply ESG principles when selecting investments (33%) or intend to do so in the future (45%).

Commenting on the findings, Investment Trends head of research, Irene Guiamatsia said that the pandemic and social movements like black lives matter along with bushfires and droughts had prompted Australians to closely examine how their actions impact the world around them.

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“Increasing, many are realising how they allocate money plays a vital role in supporting positive initiatives or avoiding harmful outcomes,” she said.

Guiamatsia said that there was a common misconception that ESG investing involved a trade-off involving sacrificing returns or accepting higher fees.

However she said current ESG investors were unperturbed in their endeavour to align their portfolio with their values and principles with the majority (81%) believing the long-term performance of ESG investments would be comparable or better than non-ESG equivalents.

“Ultimately, the proof will be in the returns,” Guiamatsia said. “As we march towards the 2050 target for net zero emissions, climate risk impact and ESG factors will increasingly become material in any well-considered long-term investment strategy.”

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