DEMAND FOR RESPONSIBLE INVESTMENT IS INCREASING.
The recent Global Financial Crisis has made more people aware of the importance of considering good corporate ethics, governance and environmental issues when examining the future worth of any investment.
Once upon a time, responsible investment was considered a niche market. Today, responsible investors come from all walks of life. The issues that motivate them are universal.
- They may have an interest in social issues or be a member of community, environmental, political or human rights organisation.
- They could have a science background and be passionate about new energy technologies as a way to solve the problem of climate change.
- They may belong to a faith-based or other spiritual organisation.
- Or they might just enjoy being close to nature, and want to ensure its preservation.
RI appeals to people from all age groups and all social backgrounds. As a result there are now products that have been developed to meet your needs at each stage of your life: from wealth creation to wealth accumulation, from retirement through to the way you choose to pass your wealth on to family and loved ones.
A recent UK report (“Responsible Investing and wealth management: opportunities for the future”, EIRIS) found that high-net-worth individuals are now looking for ways to mitigate risk and focus on long-term goals rather than more volatile short-term profits.
The world has changed to such an extent, and issues around sustainability have become so fundamental to economic stability and prosperity, that the mainstream investment community has also identified sustainable investment themes as the ones that offer the best potential for significant growth.
A number of indicators in the RIAA Annual Benchmark Report (2010) show how mainstream investors are taking steps toward integrating environmental, social and governance issues into their strategies.
- New Zealand now has 18 signatories to the United Nations Principles for Responsible Investment (UN PRI).
- Australian signatories to the UN PRI grew 34% from 65 in 2008 to 123 as at September 2011 with assets under management in excess of $500 billion.
- In fact, investment institutions representing 60% of all assets under management in Australia are now signed up to the UN PRI, which compares very favourably with the global average of 15%.
RI IN ACTION!
Find out how Carl could use positive screening and a thematic approach to gain exposure to cleantech and renewable energy shares.
WANT TO LEARN MORE?
The issues addressed by responsible investment financial advisers and fund managers are as diverse as those facing humanity in the 21st century. Learn more about these trends and themes.
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