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Consumer interest is strong and growing

An extensive body of research points to the growing popularity of ESG investing.

RIAA5 research  from 2019 found that 86% of Australians expect their super or other investments (excluding banking) to be invested responsibly and ethically. The same study found that two thirds (67%) of Australians who don’t currently invest in ethical companies, funds or superannuation funds would be most likely to consider doing so in the next 5 years.

The extent to which Covid 19 catalysed investor sentiment into action was evident in research undertaken by Investment Trends6 in 2021, which found that 78 per cent of Australian investors are either currently adopting ESG investing principles or intending to do so (a finding consistent with US research which found interest in sustainable investing at 79% overall, and a staggering 99% amongst Millennial investors7).

The RIAA8 study found that consumers have similarly high expectations of their financial advisers, with 90% expecting their adviser to offer them responsible or ethical investment options, and 86% believing that it is important for their adviser to ask them about their interests and values in relation to their investments.

Little wonder then those Australian advisers are assigning increasing importance to Responsible Investing, with Investment Trends9 finding it doubled in importance through 2021, labelling it the fastest growing priority for advisers currently.

But has sentiment turned into action? It certainly has.

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References

05

From Value to Riches 2020, Charting consumer expectations and demand for responsible investing in Australia, Responsible Investment Association of Australasia

06

Global trend towards ESG investing gathers pace, Tahn Sharpe, Professional Planner, May 2021.

07

Sustainable investing sentiment weathers economic uncertainty, Institute for Sustainable Investing, morganstanley.com, October 2021.

08

From Value to Riches 2020, Charting consumer expectations and demand for responsible investing in Australia, Responsible Investment Association of Australasia

09

ESG doubled in importance for advisers in 2021: Investment Trends, Tahn Sharpe, Professional Planner, December 2021.

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