The market for responsible investments in Australia has continued to soar in popularity to $1.2 trillion in 2020, with responsible investment assets growing at 15 times the rate that overall Australian professionally managed investments have grown – the landmark annual study from the Responsible Investment Association Australasia (RIAA) has found.
The new RIAA report, researched in collaboration with KPMG, Responsible Investment Benchmark Report 2021 Australia, shows that the Australian responsible investment market reached new highs in 2020, increasing to $1,281 billion in 2020 from $983 billion in 2019.
Additionally, the proportion of responsible investment AUM to total managed funds grew from 31% to 40% in 2020, despite there only being a 2% increase in all professionally managed funds in Australia over the same period.
While the majority of the mainstream investment market claims to be responsibly invested, those funds engaging in leading practice responsible investment have seen an explosion in assets under management, growing 30% in 2020. This movement of capital has come at the expense of the remainder of the market, which has seen the value of assets shrink by 11% ($234 billion).
“Investment managers committed to responsible investment and leading practice are seeing money moving across into their funds, while those with ineffective policies and poor processes are being left behind as the capital moves out” said Nicolette Boele, Executive, Policy and Standards for RIAA.
“The message for investment managers is clear. It’s not good enough to simply claim you’re investing responsibly. If you’re not doing it well, then there’s a high risk of losing business.
