Responsible investment becomes mainstream
The responsible investment (RI) approach, which incorporates the environmental, social and governance (ESG) factors, is no longer a niche area, with the growth being driven by preferences from millennials, women, affluent and institutional investors who have begun to evaluate asset managers based on those factors, according to Nuveen’s TIAA Investments.
However, further education and communication around the RI approach would be needed, which presented an opportunity for advisers and consultants, the firm said.
According to TIAA Investments, the RI concept had moved from being considered a niche and a product-specific approach to one that had contributed to portfolio performance leading to a broader appeal among global institutional and retail investors.
TIAA Investments’ managing director and head of responsible investment, Amy O’Brien, said: “Responsible investment is no longer considered a niche approach to investing”.
“It’s increasingly being seen as a mainstream approach, commanding a place as a prominent and recognised discipline that adds value to the investment process.”
She also stressed that globally approximately half of 300 policy tools or market initiatives covering the relationship between finance and ESG issues were developed between 2013 and 2016.
The data from the Responsible Investment Association Australasia (RIAA) indicated that around 43 per cent of assets professionally managed in Australia in 2015, or $581 billion, was managed through broad responsible investments that integrated ESG factors into investment decisions.
AUTHOR
Oksana Patron
Recommended for you
Amid a growing appetite for alternatives, investment executives have shared questions advisers should consider when selecting a private markets product compared to their listed counterparts.
Chief executive Maria Lykouras is set to exit JBWere as the bank confirms it is “evolving” its operations for high-net-worth clients.
Bennelong Funds Management chief executive John Burke has told Money Management that the firm is seeking to invest in boutiques in two specific asset classes as it identifies gaps in its product range.
Responsible investment performance concerns have lessened as the market hits $1.6 trillion in AUM, according to RIAA’s annual report, but greenwashing fears among asset managers are on the rise.
