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Investors accepting of lower returns for greater good
Australian retail investors are highly receptive of lower financial returns if the companies they invest in behave ethically towards customers, employees and the community, a new report has found.
Investors accepting of lower returns for greater good
Australian retail investors are highly receptive of lower financial returns if the companies they invest in behave ethically towards customers, employees and the community, a new report has found.
KPMG’s Shareholder Value: Shareholder Values report found that 72 per cent of retail investors rated reputation ahead of recent dividends when deciding where to invest their money.
Head of KPMG’s customer brands and marketing practice, Amanda Hicks, believes the new research shows a clear pattern in what investors expect from corporations.
“What this new research makes clear for the first time is Australian retail investors are now keenly aware of the importance of reputation, transparency, ethical behaviour, values alignment and social responsibility,” Ms Hicks outlined.
It was noted that age is a relevant factor in the findings, with younger Australians more likely to care about trust factors including the environment, ethics, values and good treatment of employees.
Middle-aged investors (aged between 41-50) were found to be the least likely to care; only half cited “ethical behaviour” as an important factor in their investment decision-making.
Australians over 60 showed a return to more ethical thinking, with 55 per cent saying trust factors play a role in their investing habits.
The report also found that female investors are more likely to prioritise ethical behaviour, environmental sustainability and whether companies pay their fair share of tax than males – across all age groups.
KPMG said the research showed that investors are giving boards permission to pursue long-term ethical goals over short-term financial outcomes.
“In fact, this survey indicates that boards and management have a green light from shareholders to pursue genuine efforts to become more transparent, more honest, more ethical and more values-driven,” according to Ms Hicks.
“The results, we believe, should drive a genuine advancement in the way we think about the phrase ‘delivering value for shareholders’,” she said.
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