With global finance standing on the cusp of an intergenerational wealth transfer worth some $30 trillion, millennials will soon take the reins in the world of investing – and they’re all about putting their money where their mouth is.
“Let’s say you have a value – let’s say you’re against animal testing – what are your options? In Australia you can vote. You may want to express your views on social media, but that’s very public. You might choose to lie down in front of a bulldozer in a rainforest. Or even better: you can make your money talk for you,” Praemium CEO Michael Ohanessian told InvestorDaily’s ESG Summit Showcase.
Mr Ohanessian said that while ESG and ethical investing has not only seen greater returns than regular strategies, it has also become vital for driving change at the highest levels of companies that have otherwise resisted the demands of their shareholders.
“If over time it turns out that pharmaceutical companies’ cost of capital is going up, because people are voting with their money, I can assure you that in time they’ll find new ways to test their products instead of testing them on animals. There’s no doubt in my mind,” Mr Ohanessian said.
Mr Ohanessian believes that society is becoming “more enlightened”, a theme that the COVID-19 has only accelerated, and that ethical and impact investing will surge as investors look for new issues to tackle.
“I’ve always thought that the world gets better. It’s hard to believe when you’re looking at the news cycle, whether it’s crime rates or violence or wars or disease, as a species we are two steps forward, one step back. But we look at the current crises and overstate them,” Mr Ohanessian said.
“Who knows what the new frontier of ethical challenges will be going forward? Animal testing is probably only a hundred years old, but maybe in a couple of decades there will be a new thing – maybe it’ll be the dominance of social media. But I think the idea is there, and I think that as a people we’re becoming better. I think that’s what driving it – we’re getting better at humanity.”
Mr Ohanessian also spoke about the need for screening technology in ESG investing and how the next generation of investors can move markets. Listen to the full episode here.
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