An investor study conducted by Schroders identified a number of key findings, including that 48 per cent of Australian investors view sustainable investing within their organisations more importantly since the pandemic began last year.
“There’s no question that sustainable investing will remain a key focus for Australian institutional investors in a post-COVID world,” Schroders Australia’s sustainability manager, Ella Reilly, said.
Fifty-one per cent of Australian investors believe engaging in environmental issues such as climate change is the most important stewardship topic (64 per cent globally), while 62 per cent also believe that greenwashing is the biggest challenge to sustainable investing.
“The message from this year’s Institutional Investor Study is clear. COVID-19 has intensified the spotlight on sustainable investing,” Schroders’ global head of sustainable investment, Andrew Howard, said.
“Investors are focused on ensuring their assets are being directed in the most sustainable ways.
“Encouragingly, performance concerns about investing sustainably have fallen significantly but challenges remain. Greenwashing continues to be a core concern and doubts persist about the ability to measure and manage risk when investing sustainably.
“Furthermore, institutional investors want to know more about their sustainable investment options. They need clarity on the goals and strategies fund managers employ and ways to track their performance. Increasingly, many also want to know the impacts their investments deliver.”
However the study also noted that 75 per cent of Australian institutional investors (80 per cent globally) continue to find sustainable investing challenging; Mr Howard said asset managers cannot engage with sustainable investing as a “compliance exercise” and must be clear about how and why they approach it.
“The fact is that, despite its recent growth, sustainable investing is still in its teenage years,” he said.
“We need to ensure that any concerns or challenges our clients may perceive when it comes to investing sustainably are completely allayed, through ever clearer reporting and disclosures.”
Neil Griffiths
Neil is the Deputy Editor of the wealth titles, including ifa and InvestorDaily.
Neil is also the host of the ifa show podcast.
