No generational gap: Responsible investing an all-age agenda

By Grace Ormsby

December 03 2019
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Australia’s responsible investment landscape has experienced a positive attitude shift – if new public perceptions of environmental, social and governance investment options are anything to go by.

Research from global asset management firm Franklin Templeton has found that a vast majority of Australia’s Baby Boomers (aged 55-73) and Gen X (aged 39-54) individuals hold consistent views with Gen Y (21-38) around the fact that superannuation funds should offer a responsible investment option to their members.

According to the analysis, 88 per cent of respondents indicated they felt this way.

For the survey, responsible investing was defined as an approach that takes into account the aspects of environmental, social and governance issues or ESG.

Even more compelling an argument for a shift in attitude towards responsible investing was the “sizeable interest across generations” in options that aim for positive impact, which Franklin Templeton said far exceeded interest in investments that only screened for negative activities.

More than 40 per cent of Baby Boomers and 44 per cent of Gen X said they would also like to see impact-related responsible investment options, while 56 per cent of Gen Y respondents felt the same way.

Giving credibility to such claims, the Responsible Investment Association Australasia (RIAA) said that while negative screening and ESG integration approaches continue to play “a significant role” for responsible investing, “impact investing has experienced an impressive growth rate of 72 per cent from 2017-18”.

A total of $13.8 billion in assets is now held this way.

Weighing in on the findings, Franklin Templeton’s Australian managing director, Matthew Harrison, said, “What’s interesting about the investor preferences uncovered in this survey is that they appear to reflect a shift in the current landscape of responsible investment in Australia.”

He said they’re seeing “a growing appetite for responsible investments that aim to deliver a positive social or environmental impact alongside financial returns”.

Nearly six in 10 respondents (59 per cent) also agreed they would pay closer attention to their superannuation if their provider reported on the environmental and social impacts of their investments.

It led Mr Harrison to observe that “people are not apathetic about their retirement finance”.

He considered that “communicating with people about how their investments might address environmental and social concerns may be a good avenue to strengthen member engagement”.

The new revelation comes after Franklin Templeton’s discovery that Australian retirees are “flying solo” when it comes to their finances.

The investment management company also found that Australia’s younger generations are experiencing stress and anxiety around their future ability to retire.

About the author

Grace Ormsby

Grace is a journalist on Momentum Media's nestegg. She enjoys being able to provide easy to digest information and practical tips for Australians with regard to their wealth, as well as having a platform on which to engage leading experts and commentators and leverage their insight.

About the author

Grace Ormsby

Grace is a journalist on Momentum Media's nestegg. She enjoys being able to provide easy to digest information and practical tips for Australians with regard to their wealth, as well as having a platform on which to engage leading experts and commentators and leverage their insight.

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Retirement