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Advisers anticipate greater engagement on responsible investing

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Two-thirds of advisers expect increased engagement from investors around responsible investing, a recent survey by the Responsible Investment Association of Australasia (RIAA) found.

Investors and advisers alike are expected to increase the pressure on the private sector following gains made at the COP26, according to the chief executive of RIAA.

We already know nine in 10 Australians want their investments to be made responsibly,” said Simon O’Connor, CEO, RIAA.

Given the strong signal Glasgow provided of a world moving ever closer to Paris Agreement targets, we anticipate this will only further encourage people to use their power as investors to take action.

While companies across a range of sectors are developing new technologies and shifting their operating models to be on the pathway to net zero, the private sector “can’t do it all”, believes AXA IM chief investment officer following the COP26 summit.

According to Chris Iggo, “there is a far way to go” despite technological advancements that are reducing the cost of lower carbon production.  

“There were consistent calls for clearer policies and regulations, for governments to use taxes and subsidies more effectively and for joined up plans and financing to deliver the infrastructure necessary to rapidly shift to a low carbon economy,” Mr Iggo said.

“The mobilisation of green finance will be important in all of this and there are increasingly larger amounts of capital controlled by asset owners, asset managers and banks that are looking to be invested in a net zero way.”

This, Mr Iggo stressed, means “huge investment opportunities” in climate leaders that are developing the technological solutions to climate change and those companies that are leading the transition to a lower carbon business model.

He supports the use of ESG techniques to identify companies that are making changes to what they do today to reduce their carbon footprint.

For investors, the good news is that we are mobilising finance to help the transition and companies are developing more sustainable technologies. We are definitely moving towards a greener economy and that brings with it tremendous investment opportunities, said Mr Iggo. 

As for advisers, Mr O’Connor noted they will need to ensure they can navigate the different products in the responsible and sustainable investment landscape and find quality investment solutions for their clients.