Impact investment approaches $20b
Impact investment has tripled over the past two years from $5.7 billion to $19.9 billion, according to the Responsible Investment Association Australasia (RIAA).
Impact investing covers those investments which deliver a positive, social or environmental impact alongside a financial return.
The Benchmarking Impact: Australian Impact Investor Insights, Activity and Performance Report 2020, was conducted by Deakin University for the RIAA. It found the majority of impact investment products were dominated by green, social and sustainable bonds, which made up $17 billion of the total assets.
This was followed by $2.9 billion which comprised of real assets, private debt, public equity, private equity, social impact bonds and others.
It was likely this trend would continue with investors indicating to RIAA that they could increase their weighting by more than fivefold to $100 billion over the next five years.
They also indicated they could invest in areas of impact investing including clean energy, housing, health and wellbeing, education and conservation.
Simon O’Connor, chief executive of the RIAA, said: “As evidence mounts that companies with better records on social issues, environmental sustainability and good governance are more resilient to COVID-19 market turbulence, this study shows a market delivering strong financial returns, while also positively impacting the lives of tens of thousands of people, such as through employment pathways, education, and health services, as well as benefiting our environment.
“There is now nearly $20 billion of capital in Australia being put to work targeted at delivering impact that builds a better society and environment. Through this impact investing we are getting an insight into the potential of capital markets to shape with the kind of world we want to live in.”
AUTHOR
Laura Dew
Recommended for you
There is one specific risk that is a significantly higher concern for financial services directors compared to companies overall and is impacting their risk appetite, according to the AICD.
Global fund managers are shunning bonds, with the asset class seeing the largest drop in allocations in more than 20 years.
Australian Ethical has seen its funds under management reach $10 billion, driven by organic customer growth and superannuation contributions.
Financial advisers will have access to private equity investments run by WTW for the first time as it launches a pooled fund to provide savers with access to traditionally institutional assets.
