ESG

Australians are increasingly demanding their superannuation funds and investments to be aligned with their values, according to the latest report by the Responsible Investment Association Australasia (RIAA), “From Values to Riches 2024: Charting consumer demand for responsible investing in Australia.” The biennial study reveals a significant shift in consumer sentiment towards responsible investing. Key findings include: • 88% of Australians expect their investments to be responsible and ethical, a demand that continues to grow from 83% in 2022. • 65% would invest more if their money actively contributed to a better world. • Greenwashing concerns are on the rise, with 78% of Australians expressing wariness, up from 72% in 2022. However, 79% would be more likely to invest in products verified as responsible by an independent source. “It’s fantastic to see Australians demanding more from their investments,” said Estelle Parker, Co-CEO at RIAA. “They want their money to work for them, deliver good returns, and also make a positive difference. Australians are increasingly concerned about greenwashing, and rightfully so. This highlights the need for robust verification processes. This study shows Australians are attuned to the important role independent verification plays in helping ensure investments truly align with responsible practices, allowing investors to make informed choices and contribute to a sustainable future.”

The Responsible Investment Association Australasia (RIAA) invites members to join our annual ESG Trends to Watch webinar.

The year 2023 has proven to be a tumultuous period for corporate Australia, marked by a series of corporate scandals and significant shareholder dissent at AGMs. Notably, a record number of ASX300 companies recorded strikes against their remuneration reports, marking the highest tally since the introduction of the two-strike rule in 2011. Analysing these vote results is crucial for investors, corporate leaders, and governance bodies alike, offering key insights into the future of responsible investment and corporate accountability in Australia.

Alphinity is an active equities investment manager based in Sydney. Alphinity was established in 2010 to specialise in Australian equity investments. In 2015, Alphinity expanded into global equities, applying the same investment philosophy to a larger set of opportunities outside of Australia.

What are materiality thresholds? Derived from financial accounting, materiality thresholds are set limits for exposure to certain industries. By setting these thresholds, funds define how much a product will be exposed to these industries. Materiality thresholds may be used in combination with chosen approach(es) to responsible investing and, risk/return considerations. They allow for greater flexibility to progress their responsible investment strategy (i.e., integrating Environmental, Social and Governance (ESG) factors into the process).

RIAA disagrees with the recent article, “Watering down super fund tests risks lower returns” published by the The Australian Financial Review. The Your Future, Your Super (YFYS) performance test is having a direct impact on the movement of capital to climate transition and achieving a net-zero economy.

Business of the meeting: To accept the minutes of the 2022 AGM; To receive, consider and adopt the financial report of the Association to the year ending 30 June 2023;

The Responsible Investment Super Study series is the most comprehensive research conducted on the responsible investment and ESG practices of Australia’s superannuation sector. Published every two years, the study aims to:

The MySuper products of super funds demonstrating leading responsible investment practice outperformed those of non-leaders on average in 2022, according to a new study released by the Responsible Investment Association Australasia (RIAA). The Responsible Investment Super Study 2023, supported by PIMCO, has named 10 Responsible Super Fund Leaders* out of the 53 assessed for the study. These funds commit to good governance and accountability; implement and measure responsible investment approaches through activities such as engagement and voting and ESG integration; regularly measure outcomes; and exhibit a high degree of transparency. Dr. Zsuzsa Banhalmi-Zakar, Research Manager at RIAA said, “Aussies that are choosing to align their super with their values are not losing out on returns, demonstrating that strong financial performance and investing ethically are not mutually exclusive.” The study also shows that legislation has reshaped the sector recently. The most significant change being the introduction of mandatory requirement for funds to disclose the assets they invest in (which came into effect in March 2022). As a result, 100% of super funds that were assessed for the study now disclose portfolio holdings, as opposed to 2021 when 62% published only their top 20 holdings or less.