ENVIRONMENTAL CONSIDERATIONS IN THE DECISIONS OF AUSTRALIAN INVESTMENT PROFESSIONALS

With the realisation that changed investment patterns are necessary conditions for sustainable development, investors and other stakeholders are becoming increasingly interested in corporate environmental performance. In some countries, environmental and eco-efficiency factors are now being considered in the context of investment decisions. Research conducted in both Australia and overseas suggests, however, that investment professionals do not place the same emphasis on environmental performance as other users of corporate reports. In this paper we report on the results of a questionnaire distributed to investment analysts in Australia. The questionnaire was directed towards identifying the extent to which environmental management and performance feature in assessing company performance, general attitudes among investment professionals towards the business-environment relation, and the constraints on the inclusion of environmental performance in investment decisions. The results indicate a very modest shift towards environmental considerations among investment professionals in Australia and that some forms of environmental risks are being assessed. However, there are constraints to the inclusion of environmental performance, most of which relate to the nature and availability of reliable information. In this paper we also contemplate the question of whether environmental reporting and performance rating systems would facilitate the integration of environmental considerations in investment decisions.