Media releases

Australian super funds that comprehensively engage in responsible investment are outperforming their peers over one, three and five-year time frames, a new report from the Responsible Investment Association Australasia (RIAA) has found. The report also shows that in the face of rising public concern and increasing financial materiality of climate change, the consideration of climate risk by super fund boards continues to grow, but there remains room for improvement. This third edition of the Responsible Investment Super Study 2019 presents the results of an annual survey of Australia’s 57 largest superannuation fundsi – accounting for $1.75 trillion in assets under management. “This year’s report shows that Australia’s largest superannuation funds – including industry, retail, corporate and public sector funds – are ramping up their engagement in responsible investing to drive superior financial performance, reduce risk, and deliver better outcomes for their members and beneficiaries,” said Simon O’Connor, CEO of RIAA. 81% of Australia’s largest super funds are committed to responsible investment (up from 70% in 2016), and 72% report annually on responsible investment activity (up from 44% in 2016), highlighting how responsible investing is increasingly being embedded within Australian investment markets.

More than 8 in 10 New Zealanders (83%) expect their KiwiSaver or other investments to be invested responsibly and ethically, new research commissioned by the Responsible Investment Association Australasia (RIAA) and Mindful Money has revealed. This compares with 7 in 10 New Zealanders (72%) in 2018. In an important signal to New Zealand’s KiwiSaver, banking and wealth management sectors, 2 in 3 New Zealanders would consider switching their KiwiSaver or other investments to another provider if their current fund engaged in activities inconsistent with their values. The NZ-wide polling, conducted by Colmar-Brunton in September, shows consumer demand for responsible and ethical investment is on the rise, as the responsible investment industry continues to grow in size and influence. “The rising consumer sentiment around ethical investing is reflected by the continuing growth in the responsible investment sector in NZ” said RIAA’s CEO Simon O’Connor. “The challenge lies with fund managers to develop and provide consumers with suitable products which match their interests, concerns and values.” Mindful Money’s founder and CEO, Barry Coates said “The survey shows that New Zealanders want to avoid investing in companies that do not reflect their values – human rights violations and labour rights abuses top the list. Now, for the first time, investors can see where their funds are invested by using the Fund Checker on Mindful Money’s website.”

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.

Impact investing is set to grow exponentially in Aotearoa New Zealand over coming years with strong interest from all types of investors including those not yet active in the field, according to a landmark study launched today. 99 investors – accounting for more than $83.5 billion of New Zealand’s assets under management – participated in New Zealand’s inaugural impact investment survey conducted by the Responsible Investment Association Australasia (RIAA) in partnership with The University of Auckland. Respondents included investors already active in impact investing as well as those not yet active in the field, and comprised investment managers, impact investment fund managers, trusts, foundations, not for profit organisations, individuals, family offices and diversified financial institutions. Impact Investor Insights Aotearoa New Zealand 2019, sponsored by AMP Capital, reveals that investors anticipate allocating a total of $5.9 billion to impact investing in the medium term. This would represent a six-fold increase in the capital currently deployed in impact investments, with $889 million of respondents’ capital currently earmarked as impact investments. Impact investing is set to grow exponentially in Aotearoa New Zealand over coming years with strong interest from all types of investors including those not yet active in the field, according to a landmark study launched today. 99 investors – accounting for more than $83.5 billion of New Zealand’s assets under management – participated in New Zealand’s inaugural impact investment survey conducted by the Responsible Investment Association Australasia (RIAA) in partnership with The University of Auckland. Respondents included investors already active in impact investing as well as those not yet active in the field, and comprised investment managers, impact investment fund managers, trusts, foundations, not for profit organisations, individuals, family offices and diversified financial institutions. Impact Investor Insights Aotearoa New Zealand 2019, sponsored by AMP Capital, reveals that investors anticipate allocating a total of $5.9 billion to impact investing in the medium term. This would represent a six-fold increase in the capital currently deployed in impact investments, with $889 million of respondents’ capital currently earmarked as impact investments. “This Report makes an important contribution to understanding how the demand for impact investing is shaping in New Zealand. It provides new insights into investors’ awareness and interest in impact investing, as well as the future prospects and challenges facing the growing field,” said Simon O’Connor, RIAA CEO.

Responsible investing has emerged as a fundamental practice for New Zealand’s funds managers, and now accounts for more than 70 percent of total assets under management (AUM), according to the latest Benchmark Report issued by the Responsible Investment Association of Australasia (RIAA). The fifth annual NZ RIAA Benchmark Report, released today by RIAA Chief Executive Simon O’Connor, shows a deepening commitment and more diverse range of offerings by asset managers, confirming responsible investing is now the bedrock of good investing. With data compiled by KPMG, the Report shows the sector grew three percent to reach $NZ188 billion in 2018. This represents a threefold increase on the NZ$58 billion invested in responsible funds only five years ago, at the end of 2013. Assets managed in accordance with responsible environmental, social and governance (ESG)_ principles now represent 72 percent of New Zealand’s total NZ$261.4 billion in AUM. By comparison, responsible investment funds in Australia represent just 44% of total AUM, according to RIAA’s latest Australian Benchmark Report released last week. “Over the last year, we’ve seen responsible investment practices continue to mature as the focus shifts beyond avoiding investing in the most harmful industries, to seeking out investments that contribute positively to New Zealand communities and the planet, alongside delivering better financial outcomes,” Mr O’Connor said.

Responsible investment funds are continuing to outperform most mainstream Australian and international funds, according to the latest Benchmark Report issued by the Responsible Investment Association of Australasia (RIAA). With data compiled by KPMG, the 18th annual RIAA Benchmark Report highlights that investors in responsible funds are reaping financial rewards with higher than average returns across one, five and 10 year horizons. “The findings of our report refute any misconception that investing responsibly comes at a cost in terms of performance, and contributes to the mounting body of evidence showing that responsible and ethical investing leads to better investment outcomes, alongside benefiting people and the planet,” said RIAA Chief Executive Simon O’Connor. Australia’s responsible investment (RI) market continued to grow in 2018, with $980 billion in assets under management, a rise of 13% on the previous year.

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 Australasian region is leading globally in the uptake of responsible investing, with 63% of total assets under management in Australia and New Zealand using a responsible investment approach. The Global Sustainable Investment Alliance (GSIA) has released its biennial Global Sustainable Investment Review 2018, showing that global responsible investment assets reached US$30.7 trillion at the start of 2018, a 34% increase from 2016. In its fourth edition, the biennial Global Sustainable Investment Review brings together the results from regional market studies by the responsible investment forums of Europe, the US, Japan, Canada, Australia & New Zealand. It also includes data on the African responsible investing market and highlights from several countries in North, Central and South America. “It is pleasing to see the continuing growth of responsible investment, both in our region and globally” said Simon O’Connor, CEO of the Responsible Investment Association Australasia.

The leaders and senior executives of Australia’s major banks, superannuation funds, insurance companies, financial sector peak bodies, civil society and academia are coming together to set out a roadmap for realigning the finance sector to support greater social, environmental and economic outcomes for the country. The Australian Sustainable Finance Initiative has today been unveiled – an unprecedented collaboration to help shape an Australian economy that prioritises human wellbeing, social equity and environmental protection, while underpinning financial system stability, in what it says is a ‘critical decade’ ahead. Modelled on international best practice already seen in groups including the European Union’s High-Level Expert Group on Sustainable Finance and the UK’s Green Finance Taskforce, the Australian Sustainable Finance Initiative will be guided by a Steering Committee charged with developing a set of recommendations to enable the finance sector to contribute more systematically to the transition to a more resilient and sustainable economy. IAG Group Executive Jacki Johnson, co-Chair of the Initiative, said: “The roadmap we create will include pathways, policy signals and frameworks that will better enable the financial services sector to contribute to delivering on international commitments, such as the Paris Agreement on Climate Change and the UN Sustainable Development Goals, while underpinning economic stability and prosperity for 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.”