Responsible
Reflections:
Adviser Insights
from the World of
ESG Investing
Responsible
Reflections:
Adviser Insights
from the World of
ESG Investing
- Introductions
- Responsible Investing and ESG integration defined
- Consumer interest is strong and growing
- Fund flows into ESG and other responsibly managed investments
- Adviser Reflection - ‘Clients have eyes wide open on these topics’
- Adviser reflection - ESG investing is for all ages
- Adviser reflection ‘Focus on economic sustainability’
- Manager Reflections - exponential growth in green bond issuance
- Adviser Reflections - ESG options now available across all asset classes
- Companies with poor ESG records pay a performance penalty
- Adviser reflections: ESG investments add alpha and reduce risk
- Responsible Investing is about more than just climate
- Manager Reflection: A balanced approach to ESG
- The challenges in looking under the hood
- Adviser reflection: navigating the nuances of greenwashing
- Questions to ask of an ESG manager
- ASIC guidance on ESG and advice processes
- Adviser reflections - best interests and financial stewardship
- In summary
Adviser reflection ‘Focus on economic sustainability’
“A lot of our clients are relatively mature, and this can come across as a radical change to some of them. And so, our sustainability narrative is that this is as much as about economic sustainability as saving the planet.” David Graham
Supply side drivers of growth
In addition to the strong demand for growth seen in recent years, it should be remembered that powerful supply drivers are at work too, some of which are underpinned by regulatory intervention.
APRA, for example, has highlighted the financial nature of climate change risks and strengthened its monitoring of climate change risk disclosures. Amongst the specific initiatives they have announced21 is their intention to update Prudential Practice Guide SPG530, designed to assist superannuation entities formulate and implement investment strategies which are inclusive of ESG factors. Consultation on this update will conclude during 2022.
Other notable recent developments include the updated Hutley Opinion on fiduciary duty, which suggests that Superannuation funds must divest from assets with a high degree of climate risk or face breaching their members’ best interests’ duties, and a surge in the number of asset owners and investment managers publicly making net-zero commitments22.
These supply side factors will undoubtedly increase community awareness of ESG issues and be matched by a proliferation of new choices for investors seeking to invest responsibly.
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References
21
Consultation on Prudential Standard SPS 530 Investment Governance in Superannuation, apra.gov.au
22
Super trustees must diversify climate risk or divest: Noel Hutley, Australian Financial Review, April 2021.
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