Policy & Regulation

The Chartered Financial Accountants (CFA) Institute developed voluntary, global industry standards, the CFA Institute ESG Disclosure Standards for Investment Products.

Federal Parliament Inquiry by the Joint Standing Committee on Trade and Investment Growth into prudential regulation of investment in Australia’s export industries.

Exposure Draft Regulations and Explanatory Statement for the Australian Government’s Your Future, Your Super (YFYS) package of reforms designed to make sure the superannuation system delivers better outcomes for members.

The Financial Markets Authority (FMA) sought views on its proposed guidance on advertising offers of financial products under the Financial Markets Conduct Act 2013. The proposed guidance set out its expectations of what good conduct in the advertising of financial products would look like.

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.“

The Financial Adviser Standards and Ethics Authority’s (FASEA) Code of Ethics (The Code) is just around the corner, coming into force on 1 January 2020. And while The Code lays the foundations of clear principles and values required for a new age of professionalism for financial advice in Australia, it goes one step further. For the first time, ethical and responsible investment is being bought to the fore.

The Responsible Investment Association Australasia (RIAA) has welcomed the Government’s 2019-20 budget announcement of $5 million for the establishment of a Social Impact Investment Taskforce. “Government has a critical role to play in the development of the market for impact investment and we welcome this announcement of a Taskforce to develop a strategy for Government’s future engagement” said Simon O’Connor, CEO of RIAA. “RIAA’s Benchmarking Impact report showed that the market for impact investing quadrupled between 2015 and 2017. 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.

The Responsible Investment Association Australasia (RIAA) has welcomed the final report of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, saying it is a clarion call for the finance sector in Australia to reflect upon its purpose and do more to service and benefit the Australian community. “The Royal Commission has revealed widespread incidences of illegal behaviour, misconduct and unethical practices across the financial services sector. These have devastated the lives of many Australians, and highlighted diverse failings of our sector”, said Simon O’Connor, CEO of RIAA. “This is a watershed moment for the finance sector. The industry and entities involved must reflect and remedy these wrongs, and address the gaps spanning leadership, culture and systems. From this stronger base, we can transform our industry for the better and start to align capital markets with achieving a healthy and sustainable society, environment and economy for all Australians. “From banks to super funds, financial advisers, and insurance companies, we must work collectively to restore the trust of Australians. By concertedly placing consumer interest at the centre of the financial services sector, we can start on this path back to regaining people’s confidence. “Acting in the best interests of clients means knowing our clients first, their financial needs, their life stage, goals and, importantly, their personal values. Only through this can we deliver on community expectations and ensure finance is acting in the best interests of clients, as was a core tenet of the terms of reference for this Royal Commission.” Consumer research conducted by RIAA shows that 9 in 10 Australians expect their money to be managed with consideration of their personal values and ethics, alongside their financial interests. This includes consideration of the social and environmental impact of their investments, whether it be avoiding investments that contribute to human rights violations and animal cruelty, or supporting investments that deliver improved healthcare, education and renewable energy. “Australians are concerned about fees and performance, but are also increasingly wanting to know how their investments and savings are working to improve the world they will retire into. “With Commissioner Hayne’s final report, the real work must now start, to rebuild community trust in the finance industry, to improve the culture within the sector, and to truly deliver services and outcomes that Australians expect from finance. “As we emerge from the Royal Commission, the finance industry is recognising the connectivity between contributing to a better society and environment, and achieving strong financial performance for Australians. “Now, more than ever, the finance sector must commit to and deliver upon a responsible and ethical approach to finance.”

A new superfund benchmarking report launched at RIAA’s Responsible Investment Conference in Melbourne today has found that over two-thirds of the largest superfunds in Australia now have embedded a commitment to responsible investment, highlighting just how deeply the move to invest with a responsible approach has become a part of Australian investment markets. The inaugural Superfund Responsible Investment Benchmarking Report (the Report) involved a detailed assessment and survey of the largest 50 superfunds1 in Australia – a universe that accounts for around $1.3 trillion of assets under management.

his was the question The Treasury sought views on last week, with the intention of enshrining this purpose in legislation to finally create clarity 24 years after the introduction of the compulsory Superannuation Guarantee.