Green or Greed

Only 1 in 20 Australians have or are aware of having a direct exposure to ‘green’ funds despite 77.8% of both investors and non-investors believing their own behaviour can make a difference to environmental issues.

Interim findings from a CoreData Green Investment Research study, which is live in the field and currently has more than 800 participants, has found only 5.0% of individuals have investments in ‘green’ or environmentally screened investment products.

The actual number may be higher when you take into account super funds that may have made allocations on behalf of members – but nonetheless it’s interesting that so few Australians are actively invested in envirnomentally screened products.

Another interesting perception fact, is that almost one in three respondents (31.%) expect an average return from ‘green’ investments to be 6% or less – 2% below the present return on straight cash investments, while 41.1% expect returns of between 7% and 10%.

Environmental concerns are certainly higher up the mainstream agenda this time around than back in 2000, when post-tech wreck investors focussed on chasing whatever measely returns they could muster from whereever they could – at the expense of many socially responsible funds.

Yet while more and more people are taking steps to minimise their carbon footprint, it seems this hasn’t necessarily flowed through to an inclination to invest in ‘green’ funds over traditional funds.

In fact 28.4% of respondents believe ‘green’ funds have a very low impact in influencing environmental protection through their investment allocations, while 36.6% feel they neither benefit or detriment the envioronment.

Interestingly, given a hypothetical scenario of investing in an ‘unethical’ fund with high returns, a regular fund with normal returns or an ‘environmental’ fund with lower returns:

One in eight (14.8%) individuals stated they would put their money in ‘unethical’ stocks, which had no concern for their impact on the earth’ if they delivered a 75% per annum return.

Three in five (60.7%) would invest in regular stocks with a 15% return, while one in four (24.5%) would accept much lower hypothetical returns of 6% from a ‘green’ fund.