ESG needs better disclosure standards
Fund managers should be subject to more rigorous standards to ensure their disclosures about environmental, social and governance (ESG) investing are accurate, according to Stoic Venture Capital.
Dr Geoff Waring, Stoic Venture Capital partner, said Australia should take the lead of the United States, European Union and United Kingdom by ramping up its scrutiny of ESG disclosure and compliance.
“Many investors are concerned about the hazy reporting of fund managers when it comes to their ESG investments,” Waring said.
“There is a lack of consistency and regulation in how funds report ESG investments and how ESG principles are integrated into their investment decisions and strategy and the impact this has on their returns.”
This was important given the growth of responsible investing which now accounted for 37% of $3.135 billion in assets under management, according to the Australian Bureau of Statistics (ABS).
“Stronger, more consistent guidelines and more information sharing would reduce the risk of misleading marketing claims about ESG investing,” Waring said.
“It would also push investor ESG preferences more effectively through fund managers down to the individual investee companies where many key decisions are being made.”
AUTHOR
Chris Dastoor
Recommended for you
Magellan has closed out the financial year with funds under management approaching $40 billion and outlined its estimated performance fees.
First Sentier Investors chief executive, Mark Steinberg, is set to depart the asset manager after seven years.
Metrics Credit Partners has completed the acquisition of Taurus Finance Group and BC Investment Group as it looks to launch consumer lending arm Navalo.
AMP has announced to the ASX that it is being sued by property fund manager Dexus regarding the sale of its real estate and domestic infrastructure equity business.
