ESG not just for the Ys: Franklin Templeton

SYDNEY – Interest in environmental, social and governance (ESG) style investing is not solely of interest to Gen Y and may be the secret to enhancing member engagement in superannuation across all demographics, according to new research by global asset management firm Franklin Templeton.

The survey found that the vast majority of Baby Boomers (ages 55-73) and Gen X (ages 39-54) were consistent with Gen Y (ages 21-38) in the view that their superannuation fund should offer a responsible investment option, with an overall average of 88% of respondents.1 In fact, 44% of Baby Boomers and 36% of Gen X said this was a very important issue, compared to 34% of Gen Y . In the survey responsible investing was defined as an approach that takes account of the important aspects of environmental, social and governance (ESG) issues.

The survey also found that there was sizeable interest across generations in responsible investment options that aim for positive impact, far exceeding interest in investments that only screen for negative activities; 41% of Baby Boomers and 44% of Gen X said they would like to see impact-related responsible investment options, as did 56% of Gen Y respondents.

According to the Responsible Investment Association Australasia (RIAA), while negative screening and ESG integration approaches continue to play a significant role, impact investing has experienced an impressive growth rate of 72% from 2017 – 2018 to a total of $13.8 billion in assets2.

“What’s interesting about the investor preferences uncovered in this survey is that they appear to reflect a shift in the current landscape of responsible investments in Australia,” said Mr Matthew Harrison, Managing Director, Franklin Templeton in Australia. “We’re seeing a growing appetite for responsible investments that aim to deliver a positive social or environmental impact alongside financial returns,” commented Harrison.

And in a finding that could make a significant difference to member engagement in superannuation, a majority of respondents across all age groups (59% overall) agreed they would pay closer attention to their superannuation if their provider reported on the environmental and/or social impact of their investments.

“What these findings seem to be telling us is that people are not apathetic about their retirement finance and communicating with people about how their investments might address environmental and social concerns may be a good avenue to strengthen member engagement.”

“While there is growing discussion at the board room level about ESG issues and investing for impact, it is likely there is more that can be done to ‘join the dots’ for everyday Australians so they better understand the role their money can play. We believe asset managers, super fund providers and financial advisers all have a crucial role to play in this”, said Mr Harrison.

“This is the first time we have conducted this survey in Australia to understand what is driving individuals’ attitudes and behaviours around planning for and living in retirement”, said Mr Harrison. “The survey has uncovered some interesting results, including that younger Australians are generally anxious about retirement savings and that interest in responsible investing is strong across multiple generations of Australians.”

This survey was conducted in Australia for the first time in May 2019 through an online questionnaire with more than 2,000 Australians aged 18 or older.

Media inquiries:

Eric Robledo Fuentes
Honner – Public Relations
+612 8248 3739
[email protected]

About Franklin Templeton Investments

Franklin Resources, Inc. [NYSE:BEN] is a global investment management organization operating as Franklin Templeton. Franklin Templeton’s goal is to deliver better outcomes by providing global and domestic investment
management to retail, institutional and sovereign wealth clients in over 170 countries. Through specialized teams, the company has expertise across all asset classes, including equity, fixed income, alternatives and custom multi-asset solutions. The company’s more than 600 investment professionals are supported by its integrated, worldwide team of risk management professionals and global trading desk network. With employees in over 30 countries, the California-based company has more than 70 years of investment experience and over AU$1 trillion in assets under management as of September 30, 2019. For more information, please visit www.franklintempleton.com.au.

About the 2019 Retirement Income Strategies and Expectations (RISE) Survey

The Franklin Templeton Retirement Income Strategies and Expectations (RISE) survey – Australia was conducted online among a sample of 2,004 adults comprising 983 men and 1,021 women 18 years of age or older. The survey was administered between 1 and 7 May, 2019, by Engine’s Online CARAVAN®, which is not affiliated with Franklin Templeton Investments. Data is weighted to gender, age and geographic region. The custom-designed weighting program assigns a weighting factor to the data based
on current population statistics. 

1. The respondent pool for the survey questions referenced in this release was made up of non-retired Australians with assets currently invested with a superannuation fund provider (self-managed super funds excluded).
2. “Responsible Investment Benchmark Report 2019 | Australia,” Responsible Investment Association Australasia. Report available at https://responsibleinvestment.org/wp-content/uploads/2019/07/RIAA-RI-
Benchmark-Report-Australia-2019-2.pdf

Copyright © 2019. Franklin Templeton Investments. All rights reserved.

Franklin Templeton Investments Australia Limited (ABN 87 006 972 247) (Australian Financial Services Licence Holder No. 225328) issues this publication for information purposes only and not investment or financial product advice.