13 July 2016:Nearly half (47%) of Australia’s investments are now being invested responsibly- totalling $633 billion - with a significant step up in consumer demand cementing this rise that has resulted in billions shifting from mainstream to responsible funds.

The new report launched today by the ResponsibleInvestment Association Australasia (RIAA), shows it’s not only consumers who are benefiting, but financial advisers, superannuation funds, fund managers andbanks who are leading the way in delivering great products with great returns, whilst creating a better environmental and social outlook for Australia.

“In observing the significant and consistent growth in responsible investment we can say without a doubt that this isn’t just a passing trend, but an evolution of the entire sector that is now being driven strongly by consumer demand and engagement with where they invest and bank their life savings,” said Simon O’Connor Chief Executive of RIAA.

“Years of demonstrated long-term investment benefits to investors, who consider environmental, social and governance (ESG)factors, have quietly shifted around half of Australia’s investment industry toinvest responsibly. Now, it is consumer demand targeted at superannuation funds, banks and financial advisers that is creating unstoppable momentum with implications for all parts of the finance sector,” said O’Connor.

In further good news from the sector, investors who have embraced the evolution have reaped the rewards with responsible investment outperforming and returning greater benefits than their mainstream peers over the last one, three, five and 10 years.

“Every year we see more Australian’s opening their eyes to the opportunities to invest ethically and responsibly. You can invest with confidence, aligning your money with your morals, and it’s not justa ‘well-intentioned’ philanthropic approach, it is generating great returns for savvy investors,”

The growth inthe responsible investment sector also shows a very deliberate approach from consumers indicating an increased engagement in investment and superannuation.“We’re told again and again that Australian’s don’t care about their super or what their money is invested in, but the results of this research showingsignificant amounts of money flowing into responsible investments mean that this is simply not true,”

The 2016Responsible Investment Benchmark Report also found:

• ‘Core’ responsible investment - that part of     the market most closely representing an ethical and socially responsible     investment (SRI) approach - has reached its highest levels in both     absolute terms and relative terms in the 15 years RIAA has been undertaking     this research
• ‘Core’ responsible investment has increased     significantly by 60% in the last year to $51 billion in assets under     management
• This part of the market – that best reflects     consumer demand for responsible and ethical investment - has doubled over     the last two years, reaching its highest relative level in a decade of     3.8% of total assets professionally managed in Australia
• Representing a major force in the investment     industry is fund managers implementing an ESG integration approach – the     leading fund managers in this ‘Broad’ Responsible Investment category now     manage $582 billion

With this continuing growth, responsible investing is becoming much more sophisticated inits approach, with an ever greater number of investors using multiple responsible investment strategies, with negative screens ever more common, alongside ESG integration, active corporate engagement and voting, as well as sustainability themed funds including low carbon funds on the rise.

“Although there has been much focus on the theme of divestment in the recent year, and this report confirms an ever stronger uptake of negative screening, the results also highlight how investment is increasingly being used to support environmentally and socially positive investments, as well as just removing support from damaging industries,” said O’Connor.

Responsible investing is reaching maturity, with a growing range of investment products and styles across all asset classes – 70investment organisations with 130 products were assessed for this research –which is a great outcome for consumers and financial advisers looking for responsible and ethical choices.

“As we can see from the report, responsible and ethical investment is now completely integrated within the financial sector. In fact, we welcome a time in the future where the differentiators of mainstream and responsible are redundant, as this will be the accepted and demanded way of investing.” concluded O’Connor.

Full copy of the report can be found here: www.responsibleinvestment.org/resources/benchmark-report/

-ENDS-

For all media enquiries contact:
Nina Stott | The Bravery on 0417 037 497 or nina@thebraveryishere.com

Notes to Editors:

 The annual Responsible Investment Benchmark report, produced by RIAA and researched by EY, is the most comprehensive review of the responsible investment sector in Australia. The report is now in its 15th year. The research was undertaken by EY, based on data from 69 investment organizations and 130 products, combined with data provided by Morningstar, UN Principles for Responsible Investment, and the Ethical Advisers Co-operative.

Responsible investments now account for nearly half of all assets managed in Australia, totaling $632.7 billion. Among fund managers adopting an ESG integration approach across their entire funds, there are 34 asset owners (mainly super funds) and 71 asset managers committed to this strategy. Additionally, 15 asset managers, managing $581.2 billion, are demonstrating leading ESG integration.

Core responsible investment has also increased, growing by 62% in one year to $51.5 billion. This represents double the funds in the last two years, reaching 3.8% of Australia's total assets under management. The most significant part of the Core responsible investment category is screened investments, which grew by 16% to $24.7 billion. Sustainability-themed investments also saw an increase, rising to $23 billion (up from only $8 billion), driven by sustainable agriculture, green property funds, and low-carbon funds. Impact investing also grew by 74%, reaching $3.7 billion.

Core responsible investment Australian equities funds outperformed the ASX300 and the average large-cap Australian equities funds over one, three, five, and ten years. Core responsible multi-growth funds also outperformed their mainstream counterparts over one, three, five, and ten years. Core responsible international equities outperformed mainstream equivalents over five and ten years.

The New Zealand companion report will be launched in Auckland on the 27th of July.

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