After a turbulent interval marked by buyer backlash and regulatory scrutiny, the Australian environmental, social, and governance (ESG) market is now seeing renewed inflows into sustainable merchandise. Wealth managers now face a essential juncture: embracing ESG just isn’t merely about assembly shopper preferences—it’s about staying aggressive in a quickly evolving market.
Towards this backdrop, regulatory expectations are tightening, with the Australian Securities and Investments Fee (ASIC) cracking down on greenwashing as allegations have been mounting. Earlier in 2025, ASIC launched additional sustainable reporting pointers, offering detailed directions for entities required beneath the Firms Act to organize sustainability stories containing climate-related monetary info. Between April 2023, and June 2024, ASIC reported 47 greenwashing interventions, comparable to civil penalty proceedings and infringement notices. Extra just lately, in March 2025, the Federal Court docket fined Energetic Tremendous A$10.5m ($6.5m) for greenwashing in a landmark case—particularly, as a result of the supplier claimed sure investments had been excluded whereas holding them in actuality. Concurrently, as regulatory scrutiny is choosing up, demand is on the rise, pushed by bettering investor confidence and rising belief in ESG-labelled merchandise.
As per Betashares, web inflows for H1 2025 got here in at a formidable A$21.6bn ($14.2bn), almost double the A$11bn garnered within the first half of 2024. In the meantime, whole property beneath administration reached a report A$280.5bn, marking a 9% improve over the earlier six months.
Clearly, sustainable investing is now not a distinct segment speaking level. GlobalData’s HNW Asset Allocations Analytics 2025 discovered {that a} putting 85.8% of Australian personal wealth managers report “very sturdy” or “fairly sturdy” demand for ESG investments—up from 76.2% in 2024, which underscores how rapidly urge for food has grown. As well as, 55.3% of wealth managers anticipate the proportion of HNW property allotted to ESG to extend over the following 12 months, with just about none anticipating a lower.
For personal wealth managers, this represents a chance. As sustainable funding choices turn into standardized and complex, purchasers will gravitate towards advisors that may provide credible, clear ESG methods. Providing a token “inexperienced” fund is now not adequate; purchasers and regulators alike anticipate transparency. Personal wealth managers want to have the ability to block the noise popping out of the US market, the place ESG has turn into a political concern, and give attention to native market tendencies and laws.
