The finance industry needs to take "the next step" and integrate environmental, social and governance (ESG) factors into all aspects of the investment process.
Speaking to InvestorDaily, Responsible Investment Association Australasia (RIAA) chief executive Simon O'Connor said that in the past five years, ESG issues have become a staple of the mainstream agenda in Australia but that the industry needs to go further.
"What's really positive is that we're seeing more acceptance than denial on how ESG translates into impacting company values, so we're really seeing that this is now a mainstream consideration," Mr O'Connor said.
"But what we need to do is really take that next step where all investment practitioners are really considering ESG impacts in all their investment decision making processes."
The RI Academy has launched an Enhanced Financial Analysis course to help investors integrate ESG into their own analysis and stock valuation.
The online course was developed in collaboration with investment specialist RobecoSAM and is targeted at investment professionals.
"We're responding to a clear demand in the market," Mr O'Connor said. "Basically our aim here is to lift the standard and to continue to progress the sophistication and robustness with which we practice ESG investment.
"We've had a number of industry people play a part in developing this content and we think it should be pretty well received."
Mr O'Connor said the ESG market in Australia will continue to grow over the long term.
"I think the early perception of ESG is that it was about people investing with their values as opposed to people investing for value, so what we see much more clearly now is that ESG is about a risk management framework," Mr O'Connor said.
"That goes beyond just listed equities and really into all asset classes and that's really where we expect to see ESG in the coming months and years."
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