Divesting from a company is not a threat John McMurdo wields lightly, but the boss of $5 billion fund manager Australian Ethical Investment has shown he is not afraid to drop a firm over its dodgy green credentials.
Last June, the head of the ASX-listed fund manager put a marker down when it divested its $5 million holding in global insurance broker Marsh & McLennan over its links to the Indian conglomerate Adani and its Carmichael coal mine in Queensland.
It’s a move many probably considered counter-intuitive but McMurdo says taking a hardline stance and divesting from companies who aren’t thinking decades down the track is perhaps the only strategy that makes financial sense.
“I think that’s what you have to be prepared to do, you need to have the strength and the conviction,” he says.
Steering money into environmentally sustainable ideas is by no means a new concept – but it is something McMurdo says is driving a seismic shift in how Australians build their wealth.
“When investors see the power of their money, and that they can do well for themselves, but also that they can do well for the planet … Australians are saying they want to see the benefits of that,” he says.
McMurdo adds the country’s move towards ethical investing has exploded in the past 12 months, at first driven by climate-minded participants following the catastrophic summer bushfires 16 months ago, and then, of course, the coronavirus pandemic.
The Sydney-based fundie says while the virus initially savaged equity markets, it also prompted investors to rethink and seek out long-term, sustainable value in a way they hadn’t before.