Society

Nuclear weapons production and the manufacture of nicotine alternatives will no longer be permitted in more than 200 investment products certified by the Responsible Investment Association Australasia (RIAA) following an update to the minimum requirements of its Responsible Investment Standard. RIAA’s Responsible Investment Standard – which informs investment-related legislation and policy, and underpins its pioneering Responsible Investment Certification Program – specifies that a responsible investment product must, at a minimum, avoid significant harm. This means investors must exclude producers of tobacco, manufacture of nicotine alternatives and tobacco-based products, controversial weapons and nuclear weapons from their portfolio. The addition of nuclear weapons to the minimum requirements of ‘avoiding significant harm’ is a result of a changing international norm, with the Treaty on the Prohibition of Nuclear Weapons entering into force in January 2021. As a result, investors seeking Responsible Investment Certification will no longer be able to invest in companies which derive revenue from the development, production and maintenance of nuclear weapons, effective 1 January 2022.

Our September meeting included presentations by Kim Randle, Executive Director and Principal Lawyer at Fair Supply and Lisa Caripis, Research and Policy Manager at Transparency International Australia (TIA). Kim’s presentation focused on modern slavery concerns throughout the global solar energy supply chain, particularly in the Xinjiang Uyghur Autonomous Region. Lisa’s presentation explored how corruption affects ESG outcomes in the mining sector. This presentation provides investors with questions to help guide an anti-corruption assessment.

Our second Human Rights Working Group meeting for 2021 included a special presentation on forced labour by Dr. Kevin Franklin, Chief Operating Officer, Advisory and Chief Product Officer at Elevate Limited. Dr. Franklin is a responsible sourcing expert based in Hong Kong. This presentation explores how technology and regulations are driving an accelerated paradigm shift. Investors interested in learning five due diligence activities will find this presentation useful. We are working on an updated version of our widely used Investor Toolkit: Human rights with a focus on supply chains.

Modern slavery and human rights showed increased dominance in environmental, social and governance (ESG) research aimed at informing and driving more responsible investment in Australia over the last year, following the far-reaching local and global impacts of COVID-19. At the 11th Annual ESG Research Australia Awards held today at the RI Australia 2021 conference from the Responsible Investment Association Australasia (RIAA), Citi, Bank of America Merrill Lynch and Credit Suisse took out awards for excellence in ESG research by a broker. An additional award from RIAA was also presented to the Australasian Centre for Corporate Responsibility for new ESG research by a non-broker. The winners of this year’s ESG Research Australia Awards are: Best Piece of New ESG Research: Nothing to lose but chains – A modern take on slavery for investors, by Zoe Whitton and Edward McKinnon, Citi • Best Piece of Ongoing ESG Research: CEO incentives and analyst expectations, by Sameer Chopra et al., Bank of America Merrill Lynch • 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 and human rights showed increased dominance in environmental, social and governance (ESG) research aimed at informing and driving more responsible investment in Australia over the last year, following the far-reaching local and global impacts of COVID-19. At the 11th Annual ESG Research Australia Awards held today at the RI Australia 2021 conference from the Responsible Investment Association Australasia (RIAA), Citi, Bank of America Merrill Lynch and Credit Suisse took out awards for excellence in ESG research by a broker. An additional award from RIAA was also presented to the Australasian Centre for Corporate Responsibility for new ESG research by a non-broker. The winners of this year’s ESG Research Australia Awards are: Best Piece of New ESG Research: Nothing to lose but chains – A modern take on slavery for investors, by Zoe Whitton and Edward McKinnon, Citi • Best Piece of Ongoing ESG Research: CEO incentives and analyst expectations, by Sameer Chopra et al., Bank of America Merrill Lynch • 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): Labour Hire & Contracting Across the ASX100, by Dr Katie Hepworth, Australasian Centre for Corporate Responsibility

The first meeting of 2021 included a special presentation by James Fitzgerald, Strategy Lead, Australasian Centre for Corporate Responsibility (ACCR) who spoke to the working group about the Juukan Gorge Senate Inquiry interim report recommendations which were published in December 2020. Investors and members are encouraged to read through the recommendations to gain insight into what measures they can push advocate for.

Report backs from subgroups.

Presentation by Simon Carter and Ruben Langbroek, Sustainable Digitalisation Project (SDP), including Investment Indicators initiative.

Presentation by Jennifer Burn, Professor of Law at the University of Technology Sydney and NSW Interim Anti-Slavery Commissioner, and Dr. Yvette Selim, Interim Deputy Director at Anti-Slavery Australia.

Presentation by Rob Jolly, Financial Sector Commission, on Modern Slavery and Human Trafficking.

Investors have collaborated to produce a best-practice guide to reporting under Australia’s Modern Slavery Act. Developed by the Australian Council of Superannuation Investors (ACSI) and Responsible Investment Association Australasia (RIAA), the best-practice guide builds on the Australian Government’s guidance. The new Act has requirements for organisations in reporting the risks of modern slavery in their operations and supply chains. The ACSI/RIAA guide provides information for investors on how to incorporate investments into their modern slavery reporting and meaningfully address modern slavery risks. ACSI CEO Louise Davidson said the new guide was developed to help investors report under the Act. “Modern Slavery is likely to exist in the operations or supply chains of most businesses. Beyond the devastating human impact, poor management of human rights impacts upon the commercial success, stability and longevity of investments,” she said. “ACSI and RIAA have collaborated to ensure investors have a clear path on how to tackle these issues and promote sustainability in their operations and supply chains. We encourage investors and companies to report within the spirit of the new law and work to develop their capacity to identify, manage, address and remediate modern slavery risks and impacts.” “It will take time and global effort to address modern slavery. Effective reporting will help to drive global awareness and ultimately improvement in practices. Investors are well placed to lead the change.” She said. RIAA CEO Simon O’Connor said the guide has been designed to help investors lead with action in respecting human rights and tackling modern slavery.