Markets

What investors often misunderstand is that despite having ‘environmental’ in its description, ESG integration screens often don’t exclude companies that damage the environment according to the 2022 Sustainability Report.

“Sometimes, the market thinks we prioritise ESG factors above investment fundamentals,” says Perennial’s Emilie O’Neill. “But the reality is that it’s just another investment lens.”

While ESG arose in the space of listed equities, private debt managers can be more effective than equity funds or other fixed income investors in getting companies to meet their ESG goals.

Increasing government expenditure on social infrastructure is driving huge levels of investment into the sector. There are now several options for retail and wholesale investors to gain exposure to this asset class, which was previously open only to institutional investors.

The Australian Securities and Investments Commission is making good on promises to combat greenwashing, issuing its second set of fines against a company for misrepresenting the ESG bona fides of an investment product.

Investors are flocking to risk stocks in the hope of an early Fed pivot following a better-than-expected US inflation report. While it is too early for a pivot, according to Atchison Consultants, the longer-term outlook for fixed income is positive.

Speaking on a fireside chat during The Inside Network’s recent ESG event in Tasmania, Langley said that while infrastructure assets will continue carrying the burden of inflation there is likely more to be concerned about with REITS, both in the dominant US market and around the world.

New data from bfinance and Invesco sees Australian investors and sovereign funds reducing exposure to growth assets in favour of private markets

The British investment firm’s current cash weightings have hit historic levels after perceived risks in the global economy moved it to help preserve rather than accumulate capital.

Sovereign wealth funds have hit pause on their internalisation programs as they discover that they aren’t naturals at private markets investing. And inflation and geopolitics are driving allocations to a broad range of alternative assets.

While the greater housing market is already reflecting the pain of constricting economic conditions, a new property fund partnership between Trilogy Funds and Michael Birch’s Murray Darling Capital shows the potential of ‘rent roll’ portfolios of rental property management agreements to provide exposure to the supersized Australian property.

Check out a selection of the images from The Inside Network’s inaugural ESG event in Tasmania, which saw a host of advisers, thought leaders and consultants share ideas on all things sustainability.