Events & News

In order to rebuild consumer trust in the financial services industry, we need to reassess what it means to act in the best interests of clients. As the ‘stewards’ of their clients’ investment portfolios, one effective way financial advisers can fulfil their role is by considering and analysing ESG information as part of investment decision making on behalf of their clients.

Executive pay and climate change are among the key issues being researched and valued within the finance industry to inform and drive more responsible investment in Australia. At the 9th Annual ESG Research Australia Awards held at the RI Australia 2018 conference in Melbourne tonight, Citi and Bank of America Merrill Lynchtook out the awards for excellence in ESG research by a broker. A new award from RIAA was also jointly presented to MSCI and the Centre for Policy Development for new ESG research by a non-broker. 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 by an Individual Analyst or Team: Bigger, Badder and more Opaque: The Task ahead for Investors Undertaking 2 Degree Scenario Analysis, by Zoe Whitton and Edward McKinnon, Citi Best Piece of Ongoing ESG Research by an Individual Analyst or Team: CEO Incentives and Analyst Expectations for ASX100 Companies, by Sameer Chopra et al, Bank of America Merrill Lynch Best ESG Broking Firm: Citi The 2018 joint-winners for RIAA’s new ESG Research Award – recognising excellence in investor relevant ESG research by a non-broking firm are: Best Piece of Investor Relevant ESG Research (non-broking firm): Climate Horizons Report: Scenarios and Strategies for Managing Climate Riskby Sam Hurley and Kate Mackenzie, Centre for Policy Development (with input from ClimateWorks Australia) AND Alignment to climate regulatory scenarios: A case study of Australian companiesby Brendan Baker and Morgan Ellis, MSCI ESG Research

A large majority of New Zealanders expect their Kiwisaver and investment funds to be invested ethically and are ready to shift their funds if company practices are inconsistent with their values. A new Responsible Investment Association and Mindful Money consumer survey undertaken by Colmar Brunton has been released today revealing New Zealanders care deeply about how their savings are invested. The research was conducted online with 1,000 research panel members. The data has been weighted to ensure it is representative of the New Zealand population in terms of age, gender and regional spread. The maximum margin of error associated with this survey is ±3.1%. It shows that people expect managers of their Kiwisavers and other investments to consider issues important to them, as well as delivering strong financial outcomes. The survey shows concern over a much deeper range of issues beyond just tobacco and controversial weapons when it comes to where their funds are invested.

Responsible investment in New Zealand has hit a major milestone, with a new report finding the vast majority of professionally managed investments are now invested as responsible investments, with total assets under management having more than doubled in just two years. Environmental, social, corporate governance and ethics considerations now sit alongside financial as critical components informing the investment decisions of the majority of New Zealand’s professional investors. The 4thannual New ZealandResponsible Investment Benchmark Report 2018 (KPMG), the most comprehensive review of the sector,reveals the industry hitting new heights with $183.4 billion now managed as responsible investments, up from $131.3 billion in 2016 and $79 billion in 2015. “The single most significant driver of growth in responsible investment is coming from the demand and desire from clients to align investments to their values – which we can track to the 2016 revelations of many KiwiSaver funds being invested in weapons and tobacco,” said Simon O’Connor, CEO of Responsible Investment Association Australasia (RIAA). “In that short amount of time, we have seen nearly the entire investment industry move to put in place a responsible investment approach, from 2.5% of the industry two years ago.

Investments that deliver positive social and environmental impact alongside a financial return are on the rise, with the market for impact investing quadrupling between 2015 and 2017, reveals a new report launched today by the Responsible Investment Association Australasia (RIAA) in partnership with the Centre for Social Impact (CSI) at Swinburne University. Benchmarking Impact: Australian Impact Investment Activity and Performance Report 2018 presents the findings from analysis of impact investment activity and performance for a data-set of 51 Australian impact investment products active at 31 December 2017, with a total product value of $5.8 billion (up from $1.2 billion at 30 June 2015). “The report reveals a diverse market delivering positive financial returns for investors while also benefiting the environment and impacting the lives of tens of thousands of people through employment pathways, education, and health services among other activities” said Simon O’Connor, CEO of RIAA. “With nearly $6 billion of capital now being put to work to deliver a better society and environment through impact investing, we are now getting an insight into the potential of capital markets as a force to be harnessed for achieving a more prosperous and sustainable Australia.”

Not quite three years ago, the 193 UN Members adopted the 2030 Agenda for Sustainable Development and its 17 Sustainable Development Goals (SDGs), hailed by the then Secretary-General Ban Ki-moon as a ‘universal, integrated and transformative vision for a better world’.

Australia’s largest superannuation funds are ramping up their engagement in responsible investing to drive superior financial performance, reduce risk, and better meet their members’ and beneficiaries’ expectations, a new report from the Responsible Investment Association Australasia (RIAA) has found. From backing shareholder resolutions demanding company disclosure on climate risk to divesting from companies with poor governance or engaged in unethical activity, Australian super funds are increasingly flexing their muscle to influence better company behaviour. RIAA’s Super Fund Responsible Investment Benchmark Report 2018 finds that 81% of Australia’s largest super funds are committed to responsible investment (up from 70% in 2016), and 62% report annually on activity, highlighting how deeply responsible investing has become part of Australian investment markets. Australia’s largest superannuation funds are ramping up their engagement in responsible investing to drive superior financial performance, reduce risk, and better meet their members’ and beneficiaries’ expectations, a new report from the Responsible Investment Association Australasia (RIAA) has found. From backing shareholder resolutions demanding company disclosure on climate risk to divesting from companies with poor governance or engaged in unethical activity, Australian super funds are increasingly flexing their muscle to influence better company behaviour. RIAA’s Super Fund Responsible Investment Benchmark Report 2018 finds that 81% of Australia’s largest super funds are committed to responsible investment (up from 70% in 2016), and 62% report annually on activity, highlighting how deeply responsible investing has become part of Australian investment markets. The Super Fund Responsible Investment Benchmark Report 2018 presents the results of a survey of Australia’s 53 largest superannuation funds1 – accounting for $1.4 trillion in assets under management.

The Responsible Investment Association Australasia (RIAA) has welcomed the Productivity Commission’s draft report Superannuation: Assessing Efficiency and Competitiveness highlighting the importance and benefits of Australia’s superannuation capital being invested responsibly to create the Australia its members want to live in and leave behind. “We agree wholeheartedly with the Productivity Commission’s report that our superannuation system needs to work for all Australians, meeting the needs of members and retirees, and delivering high performance,” said RIAA CEO Simon O’Connor. “Responsible investment provides a critical vehicle for Australia’s superannuation industry to optimise financial returns for its members. Environmental, social, corporate governance and ethical factors have become critical considerations in investment practice, increasingly impacting upon valuations and investment returns. “Responsible investment funds are outperforming their average mainstream counterparts year on year, as the market for responsible investment continues to grow in Australia. RIAA’s 2017 Responsible Investment Benchmark Report shows ‘core’ responsibly invested Australian share funds and balanced multi-sector funds have outperformed their equivalent mainstream funds over 3, 5 and 10-year horizons. Beyond RIAA’s own research, these findings have now been supported by academic and industry research from across the world’s most esteemed universities and institutions. “The bulk of evidence now clearly concludes that to ignore environmental, social, corporate governance and ethical issues blinds investors to some of the key investment risks that are increasingly determining performance of investment outcomes,” said O’Connor.

A new report was launched this week in Europe from the High Level Expert Group (HLEG) on Sustainable Finance, making wide-reaching recommendations on how to set the European financial system on a more sustainable footing, whilst driving more capital into supporting the emergence of a sustainable and inclusive economy.

The field of sustainable and impact investing has shown tremendous growth over the past few years. But there are still too many asset owners sitting on the sidelines; interested in impact, but not yet investing. To quote Bono – a recent high-profile convert to the cause – it seems that many “still haven’t found what they’re looking for”. So why does interest continue to outstrip activity? One reason is a dearth of scaled investment products. But there’s another significant problem: we still lack a common convention for understanding the impact in impact investing.