Almost half of investors willing to switch to ESG funds
Australians are looking for cleaner and greener solutions for their investments, as 43% are willing to switch funds so their money is invested in a way that considers environmental, social and governance (ESG) issues, according to research from Finder.
Gen Z were the most concerned about ethical investment, with 55% likely to invest in a fund that considered ESG issues.
According to the biennial Global Sustainable Investment Review, sustainable investment assets grew 25% between 2018 and 2020 in Australasia.
Kylie Purcell, investments specialist at Finder, said this trend was only set to continue for several reasons, especially with exchange traded funds (ETFs).
“An increase in Gen Z investors, a greater focus on sustainability from businesses and the current discourse around climate change are all contributing to the popularity of ESG ETFs,” Purcell said.
“The finite nature of fossil fuels means that the energy industry is looking for alternatives. This is creating huge growth potential in the clean energy space.
Purcell said Australians should do their research and not throw their eggs in the one basket when it came to investing.
“Nobody knows for certain which energy source – battery, solar or wind – will be the most important decades from now which can make stocks and ETFs in the sector volatile,” Purcell said.
“Aside from the positive environmental implications of these investments, we’re also seeing solid financial outcomes.
“Several ethical ETFs are reporting a one year return of more than 20%, so it’ll be interesting to watch how these newer green ETFs perform in the long term.”
The survey was conducted with 717 people.
AUTHOR
Chris Dastoor
Recommended for you
A relevant provider has received a written direction from the Financial Services and Credit Panel after a superannuation rollover resulted in tax bill of over $200,000 for a client.
Estimates for the calendar year 2024 put the advice industry on track for a loss in adviser numbers as exits offset gains from new entrants.
Adviser Ratings shares five ways that financial advice changed in 2024 with an optimistic outlook for 2025, thanks to the Delivering Better Financial Outcomes legislation.
National advice firm Invest Blue has announced several acquisitions, including the purchase of an estate planning and wealth protection business Lambert Group.
