“I don’t think ethical, or ESG or responsible investing is limited to younger demographics. I think their parents and their parents’ parents are definitely interested. My oldest ESG client is 75. They came in and said, ‘our son says we should use a low-cost index product, but we want to explore the options and get proper advice and compare the fees. And they came out with a ‘darker green portfolio because they wanted the social impact.” Nathan Fradley.
The mention of ESG issues on corporate earnings calls had skyrocketed since the start of 2020. PIMCO analysed more than 10,000 global companies and found that before 2018, less than 1% of Earnings Calls mentioned ESG. In 2019 that rose to 5% of earnings calls, and in May 2021, that rose again to 19% of earnings calls. 16
Sometimes choosing the sustainable option is less about political idealism and more about our hip pockets, or increased choices.
Spurred on by their own need to achieve net-zero to satisfy different legislation across their global markets, the world’s largest car manufacturer – Volkswagen17 – have indicated they will go Electric Vehicle (EV) only from 2035, whilst Volvo aims to get there 5 years earlier 18.
Australians embraced hybrid vehicles – and the associated lower fuel costs – years ago. And with more than half of Australians now considering the purchase of an EV as their next car19, it is clear the future sales growth of electric vehicles in Australia will be driven more by bottom-up demand than top-down policy. Similarly, the opportunity to save on power bills has seen one in four Australian homes install solar energy sources, the highest uptake in the world, and the main reason that one quarter of all electricity in Australia is now generated from renewable sources20.
These changing behaviours not only lead to increased awareness of sustainability but they are also associated with an increasing array of investable opportunities that people can relate to.
Mentions of ‘ESG’ and sustainability are being made on thousands of corporate earnings calls, Debbie Carlson, marketwatch.com, July 2021.
Volkswagen will go all electric in Europe by 2035, US to follow shortly after, Sean Zymkowski, cnet.com, June 2021.
Volvo cars to be fully electric by 2030, Volvo Media Release, March 2021.
How lenders are responding to sustainable investments push, Aaron Bell, savings.com.au, August 2021.
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