Events & News

Responsible and ethical investing in New Zealand has reached a critical point. New Zealand now has $188 billion allocated across capital markets in accordance with environmental, social, governance and ethical factors. This is the highest proportion of financial markets covered by responsible investing strategies of any market across the globe. In this context, it is tempting to suggest this once niche style of investing has become mainstream.

The Responsible Investment Association Australasia (RIAA) has welcomed today’s announcement that industry fund HESTA has committed to reducing the absolute carbon emissions in its investment portfolio by 33% by 2030 and being ‘net zero’ by 2050. “HESTA is the one of the first large Australian superannuation funds to make carbon reduction commitments of this scale across its entire portfolio, in line with the Paris Agreement on climate change.” said Simon O’Connor, RIAA CEO. “We welcome HESTA’s exemplary leadership. HESTA has read the tea leaves on the enormous risks that inaction on climate change poses to our economy and member returns. “HESTA’s announcement reflects the increasing momentum within financial services companies in Australia for insurers, banks and super funds to commit to aligning their business with the Paris Agreement. We hope other large Australian super funds committed to responsible investment will swiftly follow suit. “Increasingly we are seeing super funds step up to play an important role in delivering on critical agreements like the Paris Agreement in a manner that is aligned with their member expectations and is consistent with the direction our regulators are heading regarding climate risk guidance.

The market for impact investing – investments that deliver positive social or environmental impact alongside a financial return – is experiencing exponential growth in Australia, more than tripling over the past two years from $5.7 billion to $19.9 billion, finds a new study launched today by the Responsible Investment Association Australasia (RIAA). The study, conducted for RIAA by Deakin University Business School, reveals the burgeoning appetite for impact investing, with Australian investors – from super funds to family offices – indicating they’d like to increase their allocation towards impact investments more than fivefold to $100 billion over the next five years, and invest in clean energy, housing, health and wellbeing, education and conservation, among other themes. “As evidence mounts that companies with better records on social issues, environmental sustainability and good governance are more resilient to COVID market turbulence, this study shows a market delivering strong financial returns, while also positively impacting the lives of tens of thousands of people, such as through employment pathways, education, and health services, as well as benefiting our environment” said Simon O’Connor, CEO of RIAA.

In a time of massive market disruption brought on by the global COVID-19 pandemic, it would be fair to ask how ESG investors have performed compared to the rest of the market.

Topical issues of plastics and water scarcity, along with continued strong interest in climate change are among the key issues being researched within the finance industry to inform and drive more responsible investment in Australia. At the 10th Annual ESG Research Australia Awards, Citi, Macquarie and Credit Suisse took out awards for excellence in ESG research by a broker. An additional award from the Responsible Investment Association Australasia (RIAA) was also presented to Ausbil Investment Management and the Australian Council of Superannuation Investors for new ESG research by a non-broker. COVID-19 presents the greatest of challenges to investors, and early signs are that many responsible investment funds and companies are holding up better than their peers. Investors rely on robust and rigorous ESG research and data to help navigate turbulent times, which is why RIAA is pleased to recognise the leaders in this important research. The ESG RA Awards, attended by Australia’s leading superannuation funds, fund managers and broking firms, recognise excellence in environmental, social and governance (ESG) research published by broking firms. The winners of this year’s ESG Research Australia Awards are: Best Piece of New ESG Research: 2 degree or not 2 degree: The ins and outs of scenario analysis in real life, by Zoe Whitton and Edward McKinnon, Citi • Best Piece of Ongoing ESG Research: Macquarie’s 2019 ESG Ratings Survey, by Anita Stanley and Linda Carlanita, Macquarie • Best ESG Broking Firm: Credit Suisse The winner of RIAA’s ESG Research Award recognising excellence in investor relevant ESG research by a non-broking firm is: • Best Piece of Investor Relevant ESG Research (non-broking firm): Modern Slavery Reporting – guide for investors, by Mans Carlsson-Sweeny, Ausbil Investment Management and Kate Griffiths and Ian McIlwraith, Australian Council of Superannuation Investors. The Guide was an initiative of ACSI and RIAA’s Human Rights Working Group.

As the globe comes to grips with the COVID-19 pandemic, the world of responsible investment and sustainable finance has been readying itself for crises such as this over some time.

Recent extreme weather events in Australia have led the nation to pay closer attention to where its money is being invested, with 86% of Australians expecting their savings and super to be invested responsibly and ethically, according to new research commissioned by the Responsible Investment Association Australasia (RIAA). The study, finds that in the wake of the devastating bushfires, 3 in 4 Australians would consider moving their banking and superannuation to an alternative provider that invests responsibly and ethically, and that environmental issues (80%) are of greatest concern when investing their money. “This consumer sentiment mirrors the continuing growth of the sector with nearly half ($980 billion) of Australia’s assets under management now being invested through responsible investing” said RIAA CEO Simon O’Connor.

In a world first, welcomed by RIAA, the NZ Government will require default pension funds to exclude investments in fossil fuel producers. The Responsible Investment Association Australasia (RIAA) welcomes the announcement by the NZ government that will see the New Zealand pension system take strong steps to ensure New Zealanders auto-enrolled in a default KiwiSaver funds will not be invested in companies producing fossil fuels in addition to other strong mandated requirements for responsible investment commitments, starting June 2021. This announcement comes at a time when there is increased recognition that the financial services sector must play a strong role in supporting the transition to a low carbon world, with ever greater numbers of investors setting in place 2050 emissions reductions targets, in line with global goals under the Paris Agreement. This is a world first whereby default pensions will be mandated under law to exclude fossil fuels from portfolios, aligning with New Zealand’s strong commitments to take action under the Paris Agreement. Simon O’Connor, CEO of RIAA said: “RIAA welcomes this strong announcement by the NZ Ministers for Finance and Commerce and Consumer Affairs that will embed responsible investment into default KiwiSaver funds, consistent with RIAA’s own calls made in our submission to this review process.” In a world first, welcomed by RIAA, the NZ Government will require default pension funds to exclude investments in fossil fuel producers. The Responsible Investment Association Australasia (RIAA) welcomes the announcement by the NZ government that will see the New Zealand pension system take strong steps to ensure New Zealanders auto-enrolled in a default KiwiSaver funds will not be invested in companies producing fossil fuels in addition to other strong mandated requirements for responsible investment commitments, starting June 2021. This announcement comes at a time when there is increased recognition that the financial services sector must play a strong role in supporting the transition to a low carbon world, with ever greater numbers of investors setting in place 2050 emissions reductions targets, in line with global goals under the Paris Agreement. This is a world first whereby default pensions will be mandated under law to exclude fossil fuels from portfolios, aligning with New Zealand’s strong commitments to take action under the Paris Agreement. Simon O’Connor, CEO of RIAA said: “RIAA welcomes this strong announcement by the NZ Ministers for Finance and Commerce and Consumer Affairs that will embed responsible investment into default KiwiSaver funds, consistent with RIAA’s own calls made in our submission to this review process.” “This announcement recognises that investors who have strong commitments to a responsible investment including tackling climate change risks in their portfolios deliver better client outcomes.“

Australian super funds that comprehensively engage in responsible investment are outperforming their peers over one, three and five-year time frames, a new report from the Responsible Investment Association Australasia (RIAA) has found. The report also shows that in the face of rising public concern and increasing financial materiality of climate change, the consideration of climate risk by super fund boards continues to grow, but there remains room for improvement. This third edition of the Responsible Investment Super Study 2019 presents the results of an annual survey of Australia’s 57 largest superannuation fundsi – accounting for $1.75 trillion in assets under management. “This year’s report shows that Australia’s largest superannuation funds – including industry, retail, corporate and public sector funds – are ramping up their engagement in responsible investing to drive superior financial performance, reduce risk, and deliver better outcomes for their members and beneficiaries,” said Simon O’Connor, CEO of RIAA. 81% of Australia’s largest super funds are committed to responsible investment (up from 70% in 2016), and 72% report annually on responsible investment activity (up from 44% in 2016), highlighting how responsible investing is increasingly being embedded within Australian investment markets.

There’s been much debate recently around the appropriateness of investors targeting Australian businesses to protect our environment, to lift standards of human rights, and superannuation funds exercising their ownership on issues such as climate change.