Blogs

Momentum around responsible investment and sustainable finance hit new highs in 2022, and all indicators suggest that for our own markets of Australia and Aotearoa New Zealand, this focus on embedding sustainability into finance won’t slow in 2023. 2023 is shaping up to keep us all busy, as our sector firms up its position within the core financial market settings across the globe. Currently being hardwired into the sector are codes of practice, mandatory disclosure requirements, formal labelling standards, additional scrutiny by regulators, convergence on standard definitions and elevated expectations of investment managers, asset owners and financial advisers.

2023 is going to be an exciting year for emerging technologies. In the latest edition of Sustainalytics’ 10 for report series, we developed an approach to support investors interested in sustainability issues associated with nascent technologies, including autonomous shipping, air taxis, electric vehicles (EVs), gene therapies, AI in IT Operations (AIOps) and small modular reactors.

RIAA is pleased today to be welcoming the Kunming-Montreal Global Biodiversity Framework struck at the conclusion of COP15. This marks an important moment for the world, elevating biodiversity to be recognised as a global asset to be cherished and protected, and for the rapid decline in biodiversity to be urgently halted and reversed.

A number of significant announcements today from the Australian Government show clear recognition of the role of investors in achieving sustainable national economic prosperity, and constitute a huge win for RIAA and its members on issues that we have been advocating on for many years. Australian Treasurer Jim Chalmers has announced a new national sustainable finance strategy, recognising the key role of investors in building a sustainable and prosperous nation.

Ethical Partners, along with RIAA, First Sentier Investors, public health academics and government representatives, was pleased to be part of a recent roundtable held by the Access to Nutrition Initiative (ATNI), to discuss how investors could better leverage their shareholder voice and capital to help address nutrition and health.

ASB is one of the largest fund managers in New Zealand with over $20 billion in assets under management for around 500,000 investors. ASB Group Investments is owned by ASB Bank Limited, which was the first savings bank in New Zealand, established in 1847. RIAA spoke with Emma Lavelua, Product Manager Wealth, Managed Funds and Merrin Laurenson, Senior Product Manager at ASB about their approach to stewardship and responsible investment journey.

Increasingly, and rapidly, financial institutions will need to respond to nature-related financial risks and opportunities; akin to the precedent set by climate change. Kilter Rural was established in 2004 to deliver profit with impact: investing at scale in natural capital assets of farmland, water, and ecosystems. Kilter Rural operates natural capital positive funds across water, farmlands, and ecosystem funds and has $310 million in funds under management. RIAA spoke to Kilter Rural’s CEO, Cullen Gunn about making nature-positive investments.

The window for greenwashing is rapidly closing as laws, regulations, and standards are being established for our sector. If you are struggling to keep up with the rapid fire of acronyms, codes, consultations, and guidance being produced around responsible investment and sustainable finance, then you’re certainly not alone.

Modern slavery is a distressing and pervasive part of global supply chains and one of the most pressing human rights issues that investors can take action on. There are multiple factors that drive modern slavery and allow it to flourish, including economic dislocation, endemic poverty, and ongoing conflict and displacement.

Excluding defence companies has long been common practice for responsible investors. At a minimum, most negatively screened ‘ethical’ funds exclude the controversial weapons banned under international law: for example, chemical weapons and cluster bombs.