Emerald Wrap dazzles ethical investors

29-May-2015

By Julie May

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Australians’ adoption of responsible investing has triggered 30 per cent growth in less than six months in funds under management via the Emerald Wrap platform, the group’s chief executive reported this week.

George Lucas told financialobserver about 50 advisers currently used Emerald Wrap, which was particularly attractive to clients who wanted access to socially responsible funds and ethical fund managers.

“Socially responsible investing is a growing niche, and advisers in the space are doing rather well,” Lucas said, but added the Australian product range available to socially responsible investors was still relatively low.

“Of the 50 advisers using our platform, we’re finding a lot of the demand is being driven by clients and, like fintech, responsible investing is becoming a hot topic.”

Lucas said no other platforms in the local market currently were dedicated to a “socially responsible overlay” and that it was a much bigger trend in overseas markets such as the United States, United Kingdom, Norway and Canada.

“Australian institutions have been a bit slow off the mark,” he said, pointing to many businesses still focusing on areas such as gambling, alcohol, tobacco and carbon.

“Responsible investing was not a well-known concept 20, 30 years ago but it is gaining traction around the world, with Australia now starting to catch up,” he said.

In March, Emerald Wrap extended its menu with the addition of Australian Unity’s Altius Sustainable Bond Fund, which was a diversified local fixed interest portfolio designed to align with investors’ personal and social values without compromising long-term investment returns.

Altius chief investment officer Bill Bovingdon told financialobserver at the time the group had heard a lot of discussion about the lack of opportunities for environmental, social and governance (ESG)-conscious investors in the fixed income aspect of their portfolios, so the group decided to launch a fund to meet that growing demand.

Lucas said the extension of this fixed interest option was a great opportunity for investors looking for a fixed income fund that took ESG issues into account.

“The feedback we’re getting from advisers is that more of their clients want an ethical foundation to their investments,” Lucas said.

Meanwhile he was confident Emerald Wrap, which was established in August 2011, would grow substantially as interest in socially responsible investing increased.

Following the interview with Lucas, ANZ announced this week the launch of its first green bond in response to investor demand and in line with the bank’s commitment to supporting the transition to a lower-carbon economy.

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