Insto demand to drive growth in ESG investment
Institutional demand will continue to drive growth in environmental, social and governance (ESG) investment, with an added boost from millennials and women, according to Anthony Eames, director of responsible investment strategy at Calvert Research and Management.
The Eaton Vance affiliate fund manager said that assets in ESG strategies have soared to nearly $23 trillion globally, an increase of more than 600 per cent over the past decade, while products with responsible criteria have proliferated.
“In the 1980s, many investors kicked the tobacco habit from their portfolios. The early 2000s saw accounting scandals at Enron turn a laser focus on corporate governance issues,” Eames said.
“Today, clean energy, human rights and corporate transparency concerns are among the issues drawing strong investor interest.
“Looking ahead, we believe institutional demand will continue to drive ESG growth, with an extra push from millennials and women.”
Eames pointed out that surveys consistently show the two groups score high both in terms of their interest and actual allocations to responsible investments.
“Millennials and women also show a keen interest in advocacy and how asset managers vote their proxies on issues like board diversity and human rights,” he said.
“They wield considerable financial power. Women now control up to 60 per cent of the wealth in the U.S., and millennials, who stand to inherit trillions from their boomer parents, are likely to help shape the ESG market for decades to come.
“From this vantage point, responsible investing could still be in its infancy."
Recommended for you
Infrastructure assets are well-positioned to hedge against global uncertainty and can enhance the diversification of traditional portfolios with their evergreen characteristics, an investment chief believes.
Volatility in US markets means currency is becoming a critical decision factor in Australian investors’ ETF selection this year.
Clime Investment Management is overhauling the selection process for its APLs, with managing director Michael Baragwanath describing the threat of a product failure affecting clients as “pure nightmare fuel”.
Global X will expand its ETF range of exchange-traded funds next month with a low-cost Australian equity product as it chases ambitions of becoming a top issuer of ETFs in Australia.
