Despite a tumultuous year for markets, funds under management with the Ethical Advisers’ Co-operative (EAC) were up over 15% on the previous year with $3.13 billion invested in ethically screened products as at 31 December 2022.
2022 saw Co-op members provide advice to 4,374 clients across Australia and New Zealand, up from 3,661 clients in 2021 with $2.72 billion in funds under management.
“Despite markets being relatively flat over 2022, the level of funds invested ethically by Co-op members has increased by just over 15%,” said EAC Chair Terry Pinnell.
“This due to new adviser groups starting to invest ethically and the increasing interest of investors that are seeing the value of investing to make the environment and society a better place.
“We are expecting an increasing acceleration of investment in the next year, with new innovative investments reducing human impact on climate and reducing the loss of biodiversity.”
This changing perspective, of clients seeking more ethical investment alternatives, was well illustrated during a series of client interviews conducted by the Co-op in the lead-up to their annual Ethical Investment Week.
Tim Fitzpatrick | EAC Director
ASIC’s infringement notice against Vanguard for greenwashing, while disappointing, highlights the need for fund managers to ensure any statements about ethical propositions are accurate.
“Greenwashing is a major issue in our financial system, and so we welcome action taken by ASIC to crack down on misleading claims,” says EAC Director Tim Fitzpatrick.
“As ethical investment becomes increasingly mainstream, instances of what financial market regulators have called misleading marketing, poor product design and other types of greenwashing are certainly rising, regardless of whether it is intentional or not.”
This pervasive practice, by which funds falsely claim or exaggerate their environmental, social and governance (ESG) credentials, poses a major threat to the integrity and reputation of the investment industry.
This ‘Leaf Ratings’ analysis was accessed more than 12,500 times over 2021, reflecting an increased level of consumer awareness and concern about the genuine nature of their ethical and sustainable investments.
About Ethical Advisers’ Co-op
EAC advisers managed in excess of $2.72 billion of investment on behalf of their clients at the time of the 2021 annual report, a reflection of the growing demand by consumers for professional and ethical advice to select investments that truly conform to each clients’ ethical, environmental and sustainability values.
The EAC’s Leaf Ratings can be viewed here: https://www.leafratings.org/
Tim Fitzpatrick | EAC Director
By Jassmyn Goh - Money Management
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