ESG Research Update
/How investors choose ESG product providers
Recent research from Investment Trends and Australian Ethical has revealed how investors choose their ESG product providers, with some big names losing out when it comes to reputation. The study found that 87 per cent of investors rank the most important factor in their ESG product provider choices was the provider’s reputation.
Other factors included brand name recognition, stated ESG values, distribution network and investment track record. Some big brands have been suffering lately with poor news coming out regarding culture, governance, staff treatment or investment choices outside of ESG.
A good example is AMP Capital being dumped by a handful of superannuation funds as the ESG option after cultural issues were identified within the company’s ranks. The funds to drop AMP Capital’s Ethical Leaders Balanced Fund include Mercy Super, Legalsuper, ESSSuper and LGIAsuper.
Key findings include:
Seventy-eight per cent of respondents intend to invest based on environmental factors within the coming year
Forty-six per cent will invest with corporate governance in mind
Forty-three per cent will focus on ethical beliefs
Forty-three per cent will focus on social issues
Eleven per cent will focus on Indigenous issues
Only 40 per cent of financial advisers surveyed have discussed ESG investing with their clients in the past year
Investors are driving ESG-aligned product inflows - 55 per cent of new inflows over the past year
The survey included 2,854 Australian investors and 321 financial advisers.
