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The government’s response to the Financial System Inquiry has put a spotlight on ethical investment, according to the IPA.
In releasing its response this week, the government stated that they “will examine how best to foster growth of impact investment in Australia to support private and for-profit investment funds being directed to projects with a social or environmental purpose”.
Responding to this Andrew Conway, IPA chief executive officer, applauded the government’s commitment.
“The concept of social conscience investment is an area that we should all be making an effort to embrace; it creates win-win opportunities for investors and society,” he said.
If investors can attain a relatively healthy return on their investments, Mr Conway said, why not do so in projects that deliver greater social outcomes.
“The government’s announcement to develop legislative amendments to provide greater certainty for private ancillary funds wishing to invest in social impact bonds is to be commended.
“Consumer demand and superior financial performance have driven a huge growth in ethical investment around the world, including Australia,” said Mr Conway.
Ethical investing is experiencing rapid growth around the world with a 76 per cent growth rate in the US between 2012 and 2014, meaning 18 per cent of the US$36.8 trillion in total assets under management is now involved in ‘Sustainable and Responsible Investment’.
Polling released by the Responsible Investment Association Australasia 2015 benchmark report found that 69 per cent of Australians believe it is important that super funds make responsible investments and avoid harmful investments.