New study to bridge gap on socially responsible investing

New study to bridge gap on socially responsible investing

A national research study between the Macquarie Business School at Macquarie University and Futu Securities’ global online trading platform moomoo will investigate how sustainable trading education and transparency of company social responsibility credentials impact Australian investor behaviour.

The industry-first study will monitor the behaviour of multiple groups of investors to understand how Macquarie Business School research and exposure to a company’s ESG score influences a person’s decision to invest.

ESG or Sustainable, Responsible, and Impact-based (SRI) investing – investing that prioritises both financial returns and social change – has been gaining popularity in recent years amid a global shift towards more socially-conscious behaviour.

Macquarie Business School Professor Tom Smith says it is still unclear to what extent the social responsibility of an organisation influences Australian retail investors.

“We have a good understanding of the importance of a company’s financial performance in investor decisions, but we don’t yet have enough information in Australia to truly understand the role a company’s ESG performance plays in the decision process.” said Professor Smith.

“This study will help us better understand the drivers and barriers affecting socially-conscious investor behaviour – and shed insight on how decisions change when investors have greater transparency around where their money is really going.”

Participants will trade ASX and US stocks over a three-month period using moomoo’s simulated trading environment that reflects actual trading conditions with real market inputs.

Macquarie Business School researchers will examine the behaviour of a control group of participants against other cohorts of investors with varying levels of intervention.

These interventions will include education training sessions on why and how to conduct SRI investing, and access to information on an organisation’s social impact.

Head of Global Strategy and CEO of Australia at Futu Holdings Steve Zeng said the company is uniquely placed to partner with the university on this study, as the platform can adapt swiftly and flexibly to the requirements of the study.

“The powerful investment and analysis tools available on our platform will provide insightful and real-time data to support Macquarie in understanding the impacts of ESG reporting in a simulated trading environment,” said Zeng.

“As part of our commitment to responsible investing, we want to better understand what influences investor behaviour decisions, and whether an organisation’s socially responsible activity needs to be more accessible to investors.”

“We know that internationally, ESG-ranked stocks are increasing in popularity, in some cases regardless of their performance – which indicates a growing preference in ESG/SRI Investing.”

According to moomoo’s analysis of trading behaviour amongst its US customers, the proportion of investors trading and holding ESG-focussed stocks has trended up each quarter in the last two years.

Additionally, the number of investors holding ESG stocks increased at more than twice the rate of investors overall.

Since its launch in the Australian market in March, moomoo is rapidly expanding its presence by sharing investing knowledge and market insights via its platform, helping investors to put responsible investing into practice.

The moomoo app is backed by strong technological innovation capabilities with the research and development team accounting for around 70% of moomoo and its parent company Futu’s total workforce.

Moomoo is a technology-led investment and trading platform that offers Australians access to global markets, real-time market data, and visualised company financial analysis.