Australians confident in post-pandemic sustainable investing

Australian investors’ interest in and awareness of sustainable investment funds has increased and the majority of them now feel optimistic about moving to a sustainable investment portfolio, according to Schroders Global Investor Study 2021.

The study was conducted in March, 2021 and surveyed over 23,000 people who invest from 32 locations around the globe. It highlighted how the COVID-19 pandemic has shone a spotlight on sustainable investing, and how more investors are keen to see their investments directed in more sustainable ways. It showed that 47% of Australian investors thought environmental and social issues were more important since the start of the pandemic.

Overall, 83% of Australians said they would feel positive about moving to a sustainable portfolio because it would have a positive impact on the world. Only 9% of Australians said they did not know what a sustainable investment fund was, down from 12% in 2017.

The survey also revealed some generational differences in perspectives towards sustainable investing. Older Australian investors indicated that they had negative feelings, as 17% of those aged 71 years and older said they care less about environmental issues than they did before the pandemic. Only 3% of those aged between 18 and 50 years felt negative about sustainable portfolios.

Schroders’ Investment Director, Sustainability, Ella Reilly, said this shows that the younger generation are a key driver of the trends in sustainable investment for the future.

“A significant number of Australian investors say they are attracted to sustainable funds, for a variety of reasons including the wider environmental impact, because they aligned with societal principles or because they are perceived as likely to offer higher returns,” she said.

The study also uncovered that 34% of investors would consider sustainable investments if their financial advisers provided them more information on funds aligned with sustainability preferences and goals. Reilly said the advice community has an important role to play in the global shift to sustainable investing.

“It is clear that investor interest in sustainable investing is a trend that is here to stay, and investors will be looking to the funds management industry to respond to investor demand in this area, and for financial advisers to provide appropriate guidance,” Reilly said.

“As investment managers, it’s an opportunity for us and our responsibility to ensure we’re providing the right levels of education and collaborating quite closely with the advice community in the future.

“We need to ensure that we’re well positioned to respond to the growing investor demand that is going to happen in this area.”