Time for financials to step up: Study

New research reveals that nine in 10 Australians believe the finance sector has a key role to play in generating positive social, environmental and economic outcomes for the nation.

The study comes out of Australian Ethical and Responsible Investment Association Australasia (RIAA), who surveyed more than 1000 Australians in both capital cities and regional areas from February 7-13.

Australian Ethical chief customer officer Allyson Lowbridge said it's time for the financial services industry to step up.

"The report shows that Australians concern for climate action has reached a tipping point and they're now focusing on solutions such as responsible investing," she said.

"We hope these results serve as a call to arms for the entire industry to deliver on Australia's demands and utilise capital for a sustainable future for everyone."

RIAA chief executive Simon O'Connor said the spreading COVID-19 pandemic would change the financial sector as we know it.

"The COVID-19 crisis is reinforcing how interconnected our societal wellbeing is with business and our economy," he said.

"It's no longer acceptable for a company to single-mindedly safeguard its profits to the detriment of its staff, the community, or our environment.

"How companies and investors respond to these unchartered and challenging times will inform how we shape our future economy hopefully into one that is more inclusive, resilient and sustainable."

The study found that 86% of Australians expect their savings and superannuation to be invested ethically and responsibly.

Further, more than two in three Australians do not want their money to contribute to the destruction of the planet, with fossil fuels being a key contention point.

Of those surveyed, 60% were concerned about animal cruelty, 54% about tobacco, 51% about human rights abuses and 50% were concerned about their super contributing to gambling issues.

O'Connor said that Australians believe ethical investments can generate long-term profits.

"People are seeing strong performance of responsible and ethical investment funds and products," he said.

"Australians trust that ethical investments lead to better performance outcomes has skyrocketed with 67% of Australians believing ethical or responsible banks perform better in the long term and 62% for super funds. This is a very significant 33% rise since our 2017 research was conducted."

Gen Z (73%) and millennials (71%) are leading the pack, saying they would invest more if they knew their money would make a difference.

In comparison, only 31% of Baby Boomers said they would do the same.

RIAA identified 12 Australian super funds that it believes demonstrate a comprehensive approach to responsible investment.

These include Australian Ethical, AustralianSuper, CareSuper, Cbus, Christian Super, First State Super, Future Super, HESTA, Government Super, Unisuper, VicSuper and Vision Super.

Future Fund was also recognised for its efforts in the space.

Read more: RIAAAustralian EthicalSimon O'ConnorAllyson Lowbridge
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