Responsible and ethical investing is no longer a fad, no longer a trend, but is quickly becoming mainstream behaviour for investors in Australia. This means that the work that has been done is merely a prelude to what is needed both to find solutions to the economic, social and environmental challenges facing our world, and also to provide solutions for unlocked investor demand.
The Sustainability Report moderated a panel discussion addressing these questions in Melbourne. Sponsored by MSCI and hosted by Mercer, the panel comprised Helga Birgden, global business leader, responsible Investment, Mercer; Michelle Brisbane, CEO, Ethical Investment Services; Erin Castellas, chief impact officer, Impact Investment Group; and Michael Salvatico, executive director, ESG Research, MSCI.
With major research providers integrating environmental, social and governance information into their composite, and responsible investments under management topping $866 billion of assets, or 55.5% of total assets under management in Australia, the tipping point has been reached and the investment management industry has to look to deepening and broadening the work to include shaping the economic activities in which we all exist.
The hard work is all ahead for investors, with trillions of dollars needed to fund the adaptation to and mitigation of the low-carbon economy of the second half of the century, with megatrends on migration (voluntary and involuntary), modern slavery, life on land and in water, the challenges are boundless, and the opportunities are equally great.
The panel's insights provoked lively discussion among the audience, with topics covering consumer demand for product and the strong demand for more choice in funds and options, how to measure and account for impact, the deepening and widening base of research underpinning investment choice and product design, and the rising prominence of social issues such as modern slavery and forced migration as an investment risk.