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
Investment solution provider Channel Capital has appointed James Archer as its latest distribution director, joining from Pinnacle Investment Management.
Bennelong Funds Management has signed a memorandum of understanding with US private credit manager Monroe Capital to distribute its products in Australia.
Global equity manager Talaria Capital has appointed a Sydney-based sales director as it grows its distribution presence across Australia.
Global private markets firm Partners Group has launched an evergreen fund to provide Australian advisers with access to its cross-sector royalties strategy.
