Will Australia follow the European sustainable investment boom? By George Whiting 03 August 2021
In the first quarter of 2021, €120 billion flowed into sustainable funds in Europe. By comparison, Australia’s entire sustainable investment universe accounts for only $25 billion in asset under management, over half of which is in passive products.
There has been a mounting case for the growth in the Australian sustainable investment industry, but it pales in comparison to the movement underway in Europe. So, the question is whether Australia will follow suit.
In understanding to what extent this will happen in Australia, we first need to understand the forces at play – and sustainability starts with policy. Europe is legally bound to have net-zero emissions by 2050 and will reduce net emissions by 55 per cent from 1990 levels by 2030. This creates a natural road map for investment, whether it be technology
Consequences are unavoidable. Pension savers are crushed by interest rate repression and the changing demographics of Covid, while the deluge of debt fuelled by low rates does nothing for economic sustainability.
One of the things any investor must understand is that everything has consequences. There are always consequences. They are unavoidable. 13 years of monetary experimentation by central banks has profound consequences. For everybody.
A few days ago my colleague, Mike Hollings, CIO of Shard, and I put together a vlog on shifting market conditions. I’ve known Mike for decades, and we both agree it’s the consequences of the last 13 years of monetary distortion (since the beginning of the Global Financial Crisis that began in 2007) that present the greatest long-term challenges for markets. (You should be able to see some highlights of our chat in the latest Shard Lite-Bite video later today.)
Investegate |Alliance Trust PLC Announcements | Alliance Trust PLC: Alliance Trust PLC investegate.co.uk - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from investegate.co.uk Daily Mail and Mail on Sunday newspapers.
Charles Goodhart, Manoj Pradhan
Over the past year, concerns about inflation have reappeared. The January 2021 Centre for Macroeconomics (CfM) survey asked members of its UK-based panel whether inflationary or deflationary pressures would dominate in the upcoming decade and about the main driving forces of inflation.
Should we worry about post-Covid inflation?
Since the Global Crisis, inflation expectations have been subdued in most advanced economies. Central banks have made herculean efforts to hit their inflation targets from below. The consensus prior to Covid-19 was certainly that high rates of inflation would not be a major threat to advanced economies in the foreseeable future.