Ethical investments perform best even during the pandemic, says RIAA

Ethical and sustainable investments are the way of the future, according to the Responsible Investment Association of Australia (RIAA).

The group has released new research showing responsible investment funds outperform their mainstream competitors across 1, 3, 5 and 10-year timeframes. This includes analysis of fund stability during the economic disruption caused by COVID-19.

“The pandemic has resulted in significant economic turmoil, severely impacting many people’s livelihoods and financial markets globally. However it’s become clear that responsible investors are ahead of the game,” RIAA chief executive, Simon O’Connor said.

“They are identifying the key themes influencing markets and returns, which helps them to better navigate turbulent times, avoid the biggest risks and capture more opportunities” 

The RIAA report assessed Australia’s responsible investment market in 2019. It found over $1 billion in assets under ethical management, which was a rise of 17% from 2018. This kind of investment now represents 37% of more than $3 trillion in Australia’s professionally managed assets.

O’Connor said companies and investments simply won’t thrive in the future if issues like climate change, health, working rights, diversity and corruption aren’t taken into account. 

“Investors are fast realising that consideration of these issues provides more informed investment decisions, such as valuation and asset allocation," he said.

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What can you do to support ethical investments?

In the scheme of big business, you may feel a little helpless when it comes to directing the course of national investments. But every little choice counts, so make sure you’re putting your money where your ethical mouth is.

Start by switching your banking, superannuation and energy source to ethical and environmentally-focused providers (the RIAA has a useful online tool to help you find and compare ethical financial options ). By supporting these players you’re backing sustainable developments in Australia, as well as encouraging more people to see these organisations as profitable and preferable options. 

You can also seek out B Corp certified providers across the banking and insurance spectrum. To attain this certification, companies have to meet advanced ethical standards within their workplaces and impact communities and the environment in a similarly positive way.

When you’re not busy banking and investing, take sustainable baby steps and make sure you’re shopping preloved. Then scour the savings accounts below for an option which matches your priorities.