How sustainable finance helps Australia’s green economy bloom
In just a short 10 years, sustainable finance has ballooned. Once viewed by boards as an outlier, it is now central to investment and strategy discussions in boardrooms globally.
The environmental, social and governance (ESG) market globally will be worth $US53 trillion by 2025, according to figures from Bloomberg. This means roughly a third of all assets under management will be viewed through the prism of at least one facet of ESG.
83 per cent of Australians expect their savings to be invested ethically. iStock
Investors are now overwhelmingly concerned about where their money goes.
According to the Responsible Investment Association Australasia (RIAA), just over four out of five Australians (83 per cent) expect their bank account and their super to be invested responsibly and ethically, and 80 per cent expect their savings to have a positive impact on the world.
“The challenge now rests firmly with providers to respond with investment products, reporting and advice that meet consumer expectations,” the RIAA said in a recent report. “Those who don’t, stand a high chance of losing business, while those who do look set to thrive.”
For Andrew Duncan, managing director, head of debt capital markets for HSBC Australia, sustainable finance instruments such as sustainability-linked loans and bonds are now set to be a driving force for energy transition in Australia.
“When we started broaching green, social, sustainability and sustainability-linked (GSSS) finance with our clients a decade ago, it’s safe to say there was a fair amount of scepticism,” Duncan says.
“For the majority of issuers and investors, it was a pretty fringe concept. But in a very short space of time, it’s become central to almost everyone’s investor
Read more on afr.com
