Ethical Investment Tide Lifts ‘Greenwash’ Concerns

Tuesday, April 4, 2017

SYDNEY (Reuters) – Investors are plowing ever more into ethical funds to back their views on issues such as global warming and gender equality, but such investments can be confusingly similar to standard funds, except for higher fees and ‘green halo’ marketing.

The $23 trillion “sustainable, responsible and impact” (SRI)investment sector has received a rush of money since the Paris climate agreement and, more recently, in protest against U.S. President Donald Trump’s plans to slash environmental regulations.

Europe is the dominant region for such investments, with $12.04 trillion, followed by the United States, with $8.72 trillion, while Asia lags some way behind. U.S. investors have poured $1.8 billion into actively managed U.S. equity funds in the socially responsible category from November to January, according to Lipper data, while other funds saw a net outflow of $133 billion.

Even in fossil-fuel-rich Australia and New Zealand, SRI investment rose from $148 billion to $516 billion between 2014 and 2016, and from $729 billion to $1.09 trillion in oil-rich Canada, according to the Global Sustainable Investment Review released on Monday. Gavin Goodhand, a portfolio manager at Sydney-based Altius Asset Management, said the company’s sustainable bond fund tripled shortly after the 2015 climate accord, where nearly 200 countries signed up to measures designed to curb greenhouse gas emissions.

Source: US News (link opens in a new window)

Environment, Investing
climate change, corporate social responsibility