Media releases

The number of Australian assets managed using a rigorous, leading approach to responsible investment has hit a record value of $1.54 trillion, now accounting for 43% of the total market, according to a new study by the Responsible Investment Association Australasia (RIAA). In addition, a record 45% of investment managers are holding companies to account on matters relating to environmental and social issues, and reporting back to investors on the outcomes achieved. This number has more than doubled in the past two years, with only 21% of investment managers engaging in such activity in 2019. The findings come as part of the latest Responsible Investment Benchmark Report, researched in collaboration with EY. Responsible investment, also known as sustainable or ethical investment, is a broad-based approach to investing which factors in people, society and the environment, along with financial performance, when making and managing investments. Recent high profile action from shareholders with companies such as AGL shows investors have significant influence in shaping their future direction and strategies on issues such as climate change.This year’s report found that this approach – also known as corporate engagement – saw the greatest increase out of any responsible investment strategy in 2021. Approximately $726 billion in assets under management is now being used by fund managers to agitate for change on ESG issues, up 54% from 2020. The study also shows excellence in responsible investment materialises into substantial financial returns.Products certified under RIAA’s Responsible Investment Certification Program on average outperformed the market in the medium to long term, and over some time frames achieved two or three times the returns. This outperformance is seen both when comparing RIAA certified funds to the overall market, as well as to products of investment managers who self-declare as practising responsible investment.

Twenty of Australia’s most influential business and finance peak bodies have come to an unprecedented consensus on the need for sustainability reporting including action on climate risk through a new reporting regime that aims to set a global baseline. The group has welcomed the International Sustainability Standards Board (ISSB) draft sustainability standards in a joint submission which collectively represents the voice of 20 peak professional, industry and investor bodies in Australia who came together to prepare the joint response to the two exposure drafts. The peak bodies together represent more than 400 companies, approximately 300 investors with US$33 trillion assets under management, and 500,000 business and finance professionals. The group considers clear, transparent, comprehensive and comparable disclosure of sustainability-related information to be part of the foundation of a well-functioning global financial system. The group supports a global approach to the development of sustainability disclosure standards and for the ISSB to be the global body to issue these standards. Twenty of Australia’s most influential business and finance peak bodies have come to an unprecedented consensus on the need for sustainability reporting including action on climate risk through a new reporting regime that aims to set a global baseline. The group has welcomed the International Sustainability Standards Board (ISSB) draft sustainability standards in a joint submission which collectively represents the voice of 20 peak professional, industry and investor bodies in Australia who came together to prepare the joint response to the two exposure drafts. The peak bodies together represent more than 400 companies, approximately 300 investors with US$33 trillion assets under management, and 500,000 business and finance professionals. The group considers clear, transparent, comprehensive and comparable disclosure of sustainability-related information to be part of the foundation of a well-functioning global financial system. The group supports a global approach to the development of sustainability disclosure standards and for the ISSB to be the global body to issue these standards. The overarching goal should be a globally consistent, comparable, reliable, and verifiable corporate reporting system to provide all stakeholders with a clear and accurate picture of an organisation’s ability to create sustainable value over time

A wide cross-section of business, investor and conservation groups have come together to support the passage of the Climate Change Bill as an important step towards the greater climate policy certainty needed to support investment in the transition to a low-carbon economy. The lack of a settled national policy has consistently been cited as a key inhibitor to the effective management of climate change risk by investors, directors and other business leaders. There is bipartisan and broad community and business support for achieving net zero emissions by 2050. The Government legislating a 2030 target of at least a 43 percent emissions reduction under the Paris Agreement establishes some much-needed policy certainty. Importantly the legislation includes a process for advice and adoption of deeper targets over time. It also provides clarity to investors and the business community more broadly, given all nations have committed under the Paris Agreement to only strengthen their stated contributions. The group considers legislating a national 2030 emissions reduction target to be a timely signal to the market of the Government’s ambition, and further encouragement to Australian organisations to progress their own decarbonisation plans. Australian organisations need to remain internationally competitive to support our nation’s high living standards.

Today’s dire State of the Environment report should raise alarm bells to the Australian business and finance sectors, as the nation moves into further debt to nature, with deteriorating indicators across most measures. The health of Australia’s natural environment is becoming a material financial risk and proxy for the state of our economy, given the significant interdependencies between the two: from agricultural industries to resources, from tourism to property, right through to financing and insurance. The 2021 State of the Environment report shows the past five years have seen an alarming rise in threatened species, land clearing, extreme weather events, and destruction of Indigenous heritage, and that environmental decline is damaging human health and wellbeing. “For too long, nature has been relegated and seen as something out there beyond our cities, a place we visit only on holidays, or space that is preserved in our national parks,” said Estelle Parker, Executive Manager of Programs at the Responsible Investment Association Australasia (RIAA).

The Responsible Investment Association Australasia (RIAA) has welcomed ASIC’s greenwashing guidance, saying that it will help investment managers to raise the overall quality of sustainable finance products in Australia and to better meet consumer expectations. ASIC’s new greenwashing information sheet provides clarification on the existing obligations and laws investors should comply with to avoid greenwashing, including what disclosures they should be making and how to avoid making misleading claims. “Greenwashing poses a real threat to the future of sustainable finance. Our 2021 research shows that while the majority (89%) of the Australian investment market claims to be responsible, it is just 40% of managers that are engaged in leading practice responsible investing” said RIAA CEO Simon O’Connor. “We welcome the focus on greenwashing by ASIC which reinforces that, by law, any investor making a sustainability claim must be able to substantiate this and provide supporting evidence. This guidance will be essential reading for investors and product issuers to understand how greenwashing is defined, the existing regulations they need to comply with and the questions to consider when marketing sustainability related products, such as if the product is true to label.”

The Responsible Investment Association Australasia (RIAA) will convene the Taskforce on Nature-related Financial Disclosures’ (TNFD) official Consultation Group for Australia and New Zealand, bringing together business, finance, public sector and civil society organisations to drive engagement in nature-related business and finance issues and the future adoption of the global TNFD framework. The TNFD was established in 2020 to develop and deliver an integrated risk management and disclosure framework for organisations to report and act on evolving nature-related risks, with the ultimate aim to support a shift in global financial flows away from nature-negative outcomes and toward nature-positive outcomes. Final recommendations from the Taskforce are due in September 2023. RIAA’s role will be to provide a central point to drive the consideration, input and uptake of TNFD in our markets, working with institutional members of the TNFD Forum. This will leverage the existing work RIAA is leading including through its very active Nature Working Group, and partnerships with the Australian Department of Agriculture, Water and the Environment.

The Responsible Investment Association Australasia (RIAA) has congratulated the incoming Government of Australia, and has called for the establishment of a national sustainable finance strategy which can unlock investment opportunities and underpin strong action on climate change and other key societal issues. “From climate change to housing affordability to gender equality, many of the issues the electorate has deemed important at this election mirror the big issues which investors are pushing for action on,” said RIAA CEO Simon O’Connor. RIAA is calling on the Government to establish a whole of government approach to embedding sustainability into the financial system, to underpin a strong and prosperous economy, to position Australian competitively and to help address local and global challenges.

The Responsible Investment Association Australasia (RIAA) is ramping up its operations and presence in Aotearoa New Zealand as the demand for ethical and sustainable finance products and providers reaches new heights. RIAA’s Executive Manager for Membership and Engagement, Dean Hegarty, has returned to New Zealand from Australia, with a deeper focus on supporting RIAA members across the country and growing the membership base. “From large asset owners to community foundations; from asset managers to financial advisers, we are the largest network of people and organisations engaged in sustainable finance, and already have an active base of over 80 investors in New Zealand committed to responsible investment and harnessing capital to help deliver improved social and environmental outcomes. This has grown 63% in the last 18 months alone, and the appetite and opportunity across the industry shows no signs of abating. “The desire to expand and deepen practice is common across our membership, as demonstrated by strong participation in events and our working groups covering issues as diverse as human rights, financial advice, nature, First Nations’ Peoples rights and impact management and measurement, along with the demand for certification.”

Three-quarters of New Zealanders expect their KiwiSaver and investment funds to be invested ethically, with the majority considering moving funds if their values and interests do not align. This is one of the key findings of the new consumer survey by the Responsible Investment Association Australasia (RIAA) and Mindful Money. From Values to Riches 2022: Charting consumer demand for responsible investing in Aotearoa New Zealand, undertaken by Dynata, highlights that investors are not only looking for their fund providers to do well – they are looking for funds that also do good. 62% of New Zealanders report it is important to them that their investment makes a positive difference in the world. Expectations are higher among women (80%) than men (63%) and are highest among young people aged 18-24 (78%) who believe responsible investments will outperform traditional funds over the long term. Simon O’Connor, CEO at RIAA said: “This survey shows that half the population are apprehensive that fund providers are greenwashing and making misleading claims, and are demanding that their providers can back up their claims. Consumers have awoken to the opportunity to invest in line with their values but are also much more attuned to cut through the spin to find products that deliver on the most important issues for them. Three-quarters of New Zealanders expect their KiwiSaver and investment funds to be invested ethically, with the majority considering moving funds if their values and interests do not align. This is one of the key findings of the new consumer survey by the Responsible Investment Association Australasia (RIAA) and Mindful Money. From Values to Riches 2022: Charting consumer demand for responsible investing in Aotearoa New Zealand, undertaken by Dynata, highlights that investors are not only looking for their fund providers to do well – they are looking for funds that also do good. 62% of New Zealanders report it is important to them that their investment makes a positive difference in the world. Expectations are higher among women (80%) than men (63%) and are highest among young people aged 18-24 (78%) who believe responsible investments will outperform traditional funds over the long term. Simon O’Connor, CEO at RIAA said: “This survey shows that half the population are apprehensive that fund providers are greenwashing and making misleading claims, and are demanding that their providers can back up their claims. Consumers have awoken to the opportunity to invest in line with their values but are also much more attuned to cut through the spin to find products that deliver on the most important issues for them. “More than half of the population (54%) would be more willing to invest ethically and responsibly if financial products were certified or labelled as responsible or ethical by an independent third party. With the barrage of new ethical investment products in the market, consumers are increasingly questioning sustainability claims made by investment managers. They’re looking to trusted third parties like RIAA’s Responsible Investment Certification Program to do the heavy lifting, to make sure they are delivering on their claims.”

Four in five Australians expect their money in super, banks and other investments to be invested responsibly and ethically, but financial service providers need to do a better job of meeting expectations, with 72% of the population saying they are concerned about greenwashing, according to a new consumer study from the Responsible Investment Association Australasia (RIAA). The study, From Values to Riches 2022: Charting consumer demand for responsible investing in Australia, finds that Australians are getting more serious about aligning their money with their morals, with three-quarters (74%) of Australians considering moving to another provider if they found out their current fund was investing in companies engaged in activities inconsistent with their values. At the same time, the appetite for ethical and responsible investments continues to grow, with the number of Australians already investing responsibly up 28% from 2020 (to 17% of the population). “Australians are demanding more transparency from their providers, with 75% wanting to know which companies their super fund, bank or other investments are invested in. They are attuned to the threat of greenwashing, and it is holding many people back, particularly when it comes to switching to an ‘ethical’ bank,” said Simon O’Connor, CEO of RIAA.