Invest
Hearts and minds are influencing money moves in 2019
A survey of almost 17,000 respondents shows about 43 per cent of investors are influenced by environmental, social and governance (ESG) factors when choosing where to put their money.
Hearts and minds are influencing money moves in 2019
A survey of almost 17,000 respondents shows about 43 per cent of investors are influenced by environmental, social and governance (ESG) factors when choosing where to put their money.
The Legg Mason Global Investment Survey, involving 16,810 investors from 17 markets, including 1,000 Australians, found 55 per cent of respondents would avoid businesses with controversial track records.
The data also showed 88 per cent of investors believe that fund managers should actively “police” companies they invest in to ensure they act responsibly.
Almost half of respondents (45 per cent) said they will increase ESG investments over the next five years.
The generation gap
According to survey results, Millennials find responsible investing more important, with 70 per cent of the demographic investing in sustainable funds, as opposed to 21 per cent of Baby Boomers.
The study found Millennials (at 28 per cent) were equally as likely as Baby Boomers (at 24 per cent) to feel fund managers should consider a company’s effect on their local community.
A higher proportion of younger investors felt fund managers should consider diversity of workforce, as voted by 35 per cent of Millennials against 16 per cent of Baby Boomers.
However, Legg Mason’s Australian managing director, Andy Sowerby, said the research highlights that a lack of information, understanding or advice is the main barrier to investing more into ESG, with more than half (56 per cent) of Australian investors citing these reasons.
“This is notably higher for Millennials at 67 per cent against Baby Boomers with 48 per cent and advised investors at 61 per cent versus DIY investors 36 per cent,” Mr Sowerby said.
“It is also more likely for those in Asia (62 per cent) or in the Americas (62 per cent), rather than Europe (53 per cent).”
Where the market falters
Benchmarks for sustainable investing are one way of guiding investor decisions, but there’s a degree of scepticism among experts about just how effective these are.
In fact, according to research from investment firm Lazard Asset Management, the benchmarks may be “insufficient” in identifying the specific impacts of environmental regulations.
“While ESG ratings offer valuable inputs, we believe that, in isolation, they are insufficient to accomplish our objectives as they have some shortcomings that we believe can only be resolved through rigorous bottom-up fundamental analysis,” the researchers said.
“Frequent and thorough company engagement and the integration of meticulous ESG analysis into investment processes could potentially help investors sidestep the significant losses that tend to accompany ESG failings.”
The researchers put this down to the differing impact of ESG factors on companies, sectors, regions and time frames.
“While there is a growing acceptance that a company’s ESG practices can affect its valuation and financial performance, tying the underlying factors together is rarely a straightforward process, as many factors relating to ESG are often subjective and difficult to track and quantify,” the researchers said.
Cash
Interest rates to rise next year?
Commonwealth Bank has seconded Westpac’s predictions, forecasting that interest rates will rise well ahead of the RBA’s 2024 timeline. ...Read more
Cash
RBA makes latest official cash rate call
The Reserve Bank of Australia has made its May call on the official cash rate, with the economy said to be a long way from the conditions needed to precede a rate rise. ...Read more
Cash
RBA puts chatter of an earlier rate hike to rest
The Reserve Bank of Australia has put to rest chatter among investors that conditions for a higher cash rate could be met as early as next year, reaffirming its stance that the rate is “very likely...Read more
Cash
Australia tipped to go cashless by 2024
Australia is forecast to effectively go cashless in just three years, with three in 10 Aussies admitting that “going cashless would be great for the country”. ...Read more
Cash
Tips to finding a middle ground between equities and term deposits
With record-low interest rates and a volatile sharemarket, mature Australians looking to protect their assets while maintaining their income are being driven to fixed-income products, an industry expe...Read more
Cash
What’s next for paper money?
How many times in the past week have you actually had to pull out your wallet to pay for something? And out of those times, did you actually go to use cash? ...Read more
Cash
Last rate day of the year revealed
The Reserve Bank of Australia has announced its decision on the official interest rate for December, following predictions of a hold. ...Read more
Cash
RBA hands down rate decision on cup day
The Reserve Bank of Australia has announced its decision on the official interest rate this month, following predictions of a potential cut to rates. ...Read more
How the post-lockdown period will influence property, what the soaring NFT market means, and defining financial wellness
Listen now
APRA’s mortgage crackdown, the power of DeFi and last-minute tax tips
Listen now
What to expect as the end of lockdown looms? Will the Stage 2 tax cuts boost your tax return? Where should investors be looking as the economy reopens?
Listen now
Could property prices inflate by another 20%? What’s happening in recent dividend announcements? Did your fund fail the YFYS test?
Listen now
Cash
Interest rates to rise next year?
Commonwealth Bank has seconded Westpac’s predictions, forecasting that interest rates will rise well ahead of the RBA’s 2024 timeline. ...Read more
Cash
RBA makes latest official cash rate call
The Reserve Bank of Australia has made its May call on the official cash rate, with the economy said to be a long way from the conditions needed to precede a rate rise. ...Read more
Cash
RBA puts chatter of an earlier rate hike to rest
The Reserve Bank of Australia has put to rest chatter among investors that conditions for a higher cash rate could be met as early as next year, reaffirming its stance that the rate is “very likely...Read more
Cash
Australia tipped to go cashless by 2024
Australia is forecast to effectively go cashless in just three years, with three in 10 Aussies admitting that “going cashless would be great for the country”. ...Read more
Cash
Tips to finding a middle ground between equities and term deposits
With record-low interest rates and a volatile sharemarket, mature Australians looking to protect their assets while maintaining their income are being driven to fixed-income products, an industry expe...Read more
Cash
What’s next for paper money?
How many times in the past week have you actually had to pull out your wallet to pay for something? And out of those times, did you actually go to use cash? ...Read more
Cash
Last rate day of the year revealed
The Reserve Bank of Australia has announced its decision on the official interest rate for December, following predictions of a hold. ...Read more
Cash
RBA hands down rate decision on cup day
The Reserve Bank of Australia has announced its decision on the official interest rate this month, following predictions of a potential cut to rates. ...Read more
More articles
Website Notifications
Get notifications in real-time for staying up to date with content that matters to you.
