ESG and impact investing statistics

44% of Australians are philanthropic investors

Susannah Binsted's headshot

By

Susannah Binsted

Edited by

David Gregory

Updated

Fact checked

Impact investing is on the rise in Australia but are consumers willing to put their money where their mouths are? Finder polled over a thousand adults in Australia as part of its Consumer Sentiment Tracker (CST) in December 2024 to find out.

Quick summary

  • Around 44% of Australians continue to show interest in philanthropic investments, often prioritizing social or environmental impact alongside financial returns. Many are willing to accept slightly lower returns for greater positive outcomes
  • Men are more likely to favor earning less if it supports a social impact, highlighting gender differences in investment priorities
  • Millennials (Generation Y) still lead as the most philanthropic generation, while Baby Boomers are the least engaged in such investment
  • As of late 2023, nearly half (43%) of Australia's $4 trillion managed funds are invested using responsible investment approaches, reflecting strong growth in sustainable and ethical investing​
  • Impact investing, focused on projects like green bonds, climate-focused funds, and social initiatives, has surpassed $25 billion in Australia. The market is further supported by government policies and superannuation funds contributing to sustainable development

ESG or impact investing in Australia

  • 44% of Australians are willing to make less of a return on their investment in order for it to have a positive social impact. That’s the equivalent of over 9 million adults.
  • On average, those that are prepared to earn less are happy to see their annual returns decline by 2.62% per annum. However, 9% are only willing to cop a 0.5% reduction p.a. and another 9% of philanthropic Aussies a 1% reduction.
  • However, 1 in 10 (13%) of respondents said they’d be prepared to sacrifice 4% or more on their annual return.
  • The remaining 56% said they don’t care about investing in a company that produces a tangible social good.

Impact investing by demographic

  • Men are more likely than women to accept less of a return on their investment in order to produce a tangible social good (46% vs 41%)
  • Generation Y are the most philanthropic (55%), followed by generation Z (52%), generation X (37%) and baby boomers (32%).
  • Those in NSW and VIC are more willing to impact invest at a personal cost to them (both 48%) while those in South Australia are the least (32%).

Impacting investing in Australia

  • In Australia, responsible investment assets grew to $1.6 trillion, a 24% increase from 2022, according to the Responsible Investment Benchmark Report Australia 2024. Proportion of RI assets under management (AUM) in total managed funds rose from 36% to 41% in 2023.
  • The most common responsible investing (RI) methods are still ESG integration, stewardship, and negative screening. However, more people are starting to use approaches like positive screening, thematic investing, and norms-based investing.
  • Certified responsible investment (RI) products have been performing well over the medium to long term. These RIAA-certified products have grown significantly, reaching $167.7 billion in assets under management—a 24% increase since 2022. Over the past 10 years, they have delivered an average return of 13.20%, outperforming the 9.19% average return of other Australian share funds.
  • The main reason for the growth in responsible investing (RI) is increased demand from big investors, like superannuation funds, which rose to 53% compared to 48% in 2022. At the same time, fewer people are worried about RI not performing well, with concerns dropping from 52% in 2022 to 45%.
  • Worries about "greenwashing" (when investments claim to be more environmentally friendly than they really are) have become the biggest concern holding people back from responsible investing. In 2023, 52% of people saw this as an issue, up from 45% in 2022.
  • Investment managers are becoming more transparent than ever. A record 60% now fully share details of their portfolios, up 10% from 2022. Additionally, 86% of them now publicly share their ESG (environmental, social, and governance) policies, a 6% increase.
  • Responsible investing (RI) is becoming more accessible in Australia. Fewer people now see a "lack of understanding" (down to 17% from 26% in 2022) or "risk concerns" (down to 12% from 21% in 2022) as barriers to adopting RI.

ESG or impact investing funds in Australia

  • The Australian impact investment market has undergone significant recent growth. In 2023, a total of 93 green, social, impact, and sustainability bonds were issued in Australia, raising an impressive $25.57 billion.
  • Of the total value of Australian impact investments, 51% comprise products targeting environmental outcomes, 29% focus on sustainability, while the remaining 20% comprise products targeting social outcomes.
  • The Australian government is set to introduce ESG labeling requirements to combat greenwashing and direct more capital towards credible sustainable initiatives according to The Business Times.
  • Australia has launched its first $7 billion green bond, marking a major milestone in the country's sustainable finance market. Designed to fund projects focused on climate change mitigation and adaptation, the bond attracted strong global interest, highlighting Australia’s emerging role as a key destination for green investments. The funds will support initiatives such as green hydrogen, community batteries, and clean transportation. ESG News

Global ESG investing

  • According to a PwC report, ESG-focused investments are projected to grow by 84%, reaching $33.9 trillion by 2026, which would account for 21.5% of total assets under management. Despite this growth, 30% of surveyed investors reported difficulty in finding attractive ESG opportunities.
  • A survey of 250 institutional investors worldwide found that 60% believed ESG investing delivered higher yields than traditional strategies. However, 78% acknowledged paying higher fees for ESG funds, reflecting a trade-off between better returns and increased costs.
  • The building sector poses a challenge to decarbonization, contributing 40% of global greenhouse gas emissions, with Scope 3 emissions accounting for up to 90% of a company’s total. To address this, property owners must comply with ESG regulations, as 49 cities, six states, and the SEC now require climate-related disclosures.
  • Green leasing, emphasizing energy efficiency and water conservation, is gaining traction. This approach can cut U.S. office energy use by 22% and save up to $0.51 per square foot in utility costs.
  • AI-driven property technologies are revolutionizing property management, with the smart building market expected to reach $568 billion by 2032. Automated systems enhance ESG compliance, making properties 120% more likely to measure emissions accurately and 90% more likely to meet reduction targets. Building Management Systems (BMS) with digital controls can save up to 29% in energy, with additional savings from advanced features like fault detection, improving sustainability and tenant experiences.

Sources

To make sure you get accurate and helpful information, this guide has been edited by David Gregory as part of our fact-checking process.
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Head of Finder Awards

Susannah Binsted is the head of the Finder Awards program. Previously she was the head of public relations for the international division at Finder. Susannah has a Bachelor of Communication and a Bachelor of International Studies from the University of Technology Sydney. See full bio

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