Sustainable investing at tipping point

31-Jul-2017

By Daniel Paperny

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Australia’s financial services sector is at a “tipping point” when it comes to embracing sustainable investing and the increasing shift by fund managers to adopt environmental, social and governance (ESG) principles in their investment frameworks is a sign of the evolving behaviours of the modern day investor, according to fintech start-up Goodments.

Presenting as one of seven start-ups at H2 Ventures’ fourth annual Fintech Expo in Sydney last week, Goodments co-founder and chief marketing officer Emily Taylor spoke of the rise of a burgeoning class of millennial investors who were significantly more “invested” in their investment decisions as well as their legacy and impact on the world around them.

“We’ve reached a tipping point when it comes to ethical investing and that is because it is more sustainable, but importantly because it’s actually better for the wallet [of end investors],” Taylor said.

“There has been 86 per cent sustainable investment growth since 2014, we’ve seen $5.2 trillion globally from the divestment movement and … the next question is not what do I not invest in, but where can I put my money?”

Goodments is a personalised investment platform that targets this emerging class of ethically minded retail investors who are matched with shares based on their environmental concerns, social values and ethical beliefs.

Speaking to financialobserver, Goodments co-founder Tom Culver said modern investors were primarily driven by the freedom to be able to make decisions based on their ethics and values, a desire for transparency and ownership of the company they were investing in, as well as a simple and frictionless process that made it engaging for them.

“We weren’t able to achieve these things by simply putting people into funds [because] a fund doesn’t give that level of flexibility and choice that each individual wants,” Culver said.

“We have definitely come up against some questions, particularly from investors, about our decision to do share trading rather than funds, because the common assumption is that young people especially don’t buy shares.”

Goodments was the first start-up to enter ASIC’s regulatory sandbox, a regulatory exemption that allows fintech businesses to test a range of new financial products and services without an Australian financial services licence.

“We think we’ll have our [financial services] licence in the next few weeks - ASIC are very encouraged by what we’re doing and what that will allow us to do is launch our product more formally over the next two to four weeks to our waiting list customers,” Culver added.

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