Insights into consumer trends from Australian Ethical
We’re reaching a tipping point, with people pushing the planet beyond many of its boundaries. The result will be escalating geopolitical conflicts over resources, a cycle of human rights issues, and continued planetary warming, resulting in what many scientists and policymakers are calling a Polycrisis.
It’s no wonder RIAA’s latest research report ‘From Values to Riches 2024’ reveals Australians are concerned about so many different issues we are facing as a society.
This concern is translating to an acceleration in the desire for access to investments that align with their values – nearly 90% expect their super or other investments to be invested responsibly and 76% say that it not being aligned would cause them to consider switching to another provider.
But the biggest issue is that so many of the things that people are concerned about – animal cruelty, fossil fuel investment, biodiversity, investment in armed conflict – are in fact supported by the way some providers invest.¹
Aside from the duplicity, why does it matter?
The adage ‘Money makes the world go around’ has some truth. And the more money that is invested in responsible funds that do what they say they do, the more difference we can collectively make. Imagine the potential if all those that said they would switch, did.
At Australian Ethical we have a theory of change – We shift capital from companies that aren’t aligned to our future to those with positive influence. We use our position as investors to call for companies to behave ethically and are prepared to divest loudly, as well as collaborate with others when they don’t. If we can consistently generate returns for our investors, by navigating systemic risks and taking advantage of opportunities caused by dislocations in financial markets, then it will encourage others to bake environmental and social costs into investment valuations. This positive cycle will ultimately take us towards a different tipping point where money truly becomes a force for good.
However, we are in a race for time. How can we bring this more positive tipping point forward?
We’re working hard to influence change as much as we can, and alongside our investment in listed assets we’re partnering to create more impactful asset allocation, from our infrastructure debt fund to our impact investments focussed on social housing, microfinance, and addressing biodiversity issues. We’re pushing our stewardship activity beyond our portfolio to try to address the bigger systemic risks we are facing.
But we can’t do this alone. As an industry we must create better responsible investment options to help Australians truly align their investments with their values and, aside from broader policy changes, the government should provide an investment framework that makes it easier for advisors and consumers to understand their investments.
And let’s not forget that responsible investing isn’t philanthropy. At Australian Ethical we believe investing can deliver both attractive investment returns while also influencing progress towards a better future for the planet and all its inhabitants. And we’ve proved this over the 37 years we’ve been doing ethical investing. After all, when you prosper, we all thrive.
¹ https://www.abc.net.au/news/2023-12-14/sustainable-ethical-super-funds-with-fossil-fuel-investment/103196032
Disclaimer from Australian Ethical: To consider whether a financial product is right for you, read the relevant PDS and TMD at australianethical.com.au
Australian Ethical Investment Ltd (ABN 47 003 188 930, AFSL 229 949)
Maria Loyez, Chief Customer Officer at Australian Ethical.
Maria is responsible for sales, marketing and customer experience to help drive business growth, which in turn increases positive impact on society. Maria has more than 20 years strategic marketing, Cx and leadership experience having previously held senior roles at neo-bank Volt, SocietyOne, OFX, AMP, Optus, and Virgin.
Disclaimer: The views and opinions expressed in this article are solely those of the author(s) and do not necessarily reflect the view or position of the Responsible Investment Association Australasia (RIAA). This article is intended as general information and should not be considered investment advice. It is recommended to seek appropriate professional advice before making any investment decisions.