The study conducted by the Responsible Investing Association Australasia (RIAA) and Deakin University Business School revealed Australian investors appetite for impact investing, with Australian investors currently investing over $19.9 billion into the sector.
The study found that this number is likely to be five times the size over the next five years as investors put their super funds to family offices towards impact investing.
According to RIAA, Australians want to use their money to invest in clean energy, housing, health and wellbeing, education and conservation, with COVID-19 providing the opportunity to do so.
“The reported social and environmental outcomes of products that Australian impact investors are invested in are diverse and include:
“32,000 homes for people on low incomes, living with disability or transitioning out of homelessness; producing 84,000 GWh renewable energy; delivery of 788,000 healthcare treatments and mental health interventions, 446 jobs secured by candidates previously excluded from employment; training of 179,000 teachers; 37,856 homes provided with electricity, and saving, treating or delivering 483,235 mega-litres of water,” RIAA stated.
The RIAA also found that investors who are currently investing ethically are achieving greater return despite market panic due to COVID-19.
“As evidence mounts that companies with better records on social issues, environmental sustainability and good governance are more resilient to COVID market turbulence, this study shows a market delivering strong financial returns while also positively impacting the lives of tens of thousands of people,” RIAA stated.
Investors reported that overwhelmingly (92 per cent) their impact investments are meeting or exceeding their financial return expectations.
The weighted average annualised returns (net of fees) during the study period for impact investments ranged between 3.5 per cent for private debt and 11.3 per cent for public equity. GSS bonds averaged 5.1 per cent pa, while real assets returned 7.4 per cent pa and social impact bonds returned 3.9 per cent pa.
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