Socially responsible investing to give accountants 'competitive edge'

Research undertaken by The IPA-Deakin SME Research Centre has revealed that more investors are turning towards socially responsible investing (SRI), highlighting the importance of accountants to boost their knowledge in this field.

“As accountants move into financial advice, [SRI is] something that would impact them in terms of the type of advice they might be giving to clients, so if there’s more demand from clients for SRI then they're going to have to be across it,” IPA executive general manager, advocacy and technical, Vicki Stylianou, said.

“Certainly right now, it would give [accountants], with some clients and in some sectors, a competitive edge.”

Ms Stylianou said the shift towards SRI has manifested itself in a number of ways, such as clients not wanting to invest in companies that deal with tobacco or nuclear weapons, instead opting for companies that might be involved in renewable energy.

Ms Stylianou said accountants should start increasing their knowledge base around SRI and having conversations with their clients as practices “become more attractive to investors who are interested in these things”.

“If [accountants are] in practice, they can start talking to clients about it in some way. They could say, ‘I’ve heard about this. Is this something you’re interested in?’ And see if their values align with their clients’ values,” Ms Stylianou said.

The SRI trend is in line with the United Nations’ Sustainable Development Goals (SDG), which Ms Stylianou said “seems to be gathering speed”.

“There’s a lot of evidence [the UN has] collected from around the world to say that a lot of businesses are starting to become aware [that SDG] is actually a really good thing, that it does also very much help their bottom line, it helps their profitability,” she said.

“[SRI] is something that accountants will at least need to be aware of and think about adopting to some extent as much as they can.”