Invest for good 

Environmentalists cheered by huge improvements in air quality during the lockdown – and the collapse in coal power generation – have another reason to celebrate. Even the stock market has gone in their favour.

A detailed number-crunching of environmentally sustainable funds has revealed that they have outperformed traditional funds across the board – beating them during the pandemic as well as during the 10 years up to and including the coronavirus sell-off.

The data, from the global research agency Morningstar, comes amid growing evidence that environmentally focused investing – once pigeonholed by City traditionalists as only for a vegan/hippy minority – is becoming mainstream. This week, Vanguard, one of the world’s biggest fund managers, launched two ethical index funds aimed at UK investors, while Aviva, Britain’s biggest insurer, unveiled a “climate transition” fund.

Recent years have seen a surge in interest in socially responsible or ethical investing, both in Australia and globally, coinciding with widespread concern around environmental and societal and governance (ESG) issues. Advisers are likely to find an increasing number of clients want to invest in a way that reflects their ethical and environmental stance.

We hosted the second instalment of the Women Leading Climate Action series on Tuesday, a virtual discussion in partnership with ActionAid Australia that aims to lift the voices of women who are leading on solutions and action on climate change.