Speaking at the ESG Summit, held in Sydney on Thursday, the Responsible Investment Association Australasia (RIAA) chief executive officer Simon O’Connor said the number of Australians expecting their adviser to know about responsible investment options increased to 64 per cent in 2022, up from 54 per cent in 2020.
Knowledge of responsible investment overtook the prioritisation of investment returns (58 per cent) for the first time, Mr O’Connor revealed.
Interestingly, the expectation for advisers to be knowledgeable about financially lucrative investment options sunk to 48 per cent last year, from 51 per cent a couple of years earlier, while the expectation to consider consumers’ values when devising investment options jumped from 43 per cent to 50 per cent.
Moreover, Mr O’Connor revealed that three in five (61 per cent) Australians would be motivated to try to save and invest more money if they knew their savings and investments made a positive difference in the world, up from 61 per cent in 2020.
According to Mr O’Connor, the Australian ESG landscape is expected to shift from a “nice to have” to a compliance and regulatory driven marketplace this year.
“We’ve seen that flagged very clearly from our Treasurer in December last year, when he laid down plans for pursuing a regulatory and legislative agenda around sustainable finance and ESG,” he told ifa earlier.
Revealing the top social and environmental issues for consumers, Mr O’Connor said animal cruelty is the number one concern for Australians (58 per cent), followed by human rights abuses (52 per cent), animal testing for non-medical purposes (50 per cent), pornography (50 per cent), and environmental damage (50 per cent).
Also speaking at the ESG Summit, Dugald Higgins, head of responsible investment and sustainability at Zenith Investment Partners, explained that developments across major markets are meaningfully changing advice requirements.
“Advisers are being required to formalise consideration of a range of RI elements into the advice process,” Mr Higgins told a room full of delegates.
In the European Union, for example, advisers are asked to inform clients about sustainability preferences, while in the US, advisers are obliged to disclose their ESG investing approach alongside maintaining supporting documentation.
Mr Higgins assessed that the environment could shortly change for local advisers given the Australian Securities and Investments Commission has already acknowledged that global harmonisation is desirable.
The ESG Summit will be held in Melbourne on 29 March. To find out more and book your tickets, click here.
