How we evaluate products
Responsible Investment strategies, processes, practices and disclosures are assessed against the eight criteria for product certification in the Responsible Investment Standard and accompanying Guidance and Assessment Notes.
What this symbol means
General certification: This Symbol signifies that a product or service offers an investment style that takes into account environmental, social, governance or ethical considerations, and that it adheres to the operational and disclosure practices required under the Responsible Investment Certification Program for the category of Product.
<span class="text-size-xxsmall">The content on this webpage is provided by Responsible Investment Association Australasia Ltd (ACN 641 046 666, AFSL 554110). For more information refer to our Financial Services Guide. Certain content provided may constitute a summary or extract from the offer document of a financial product. Any general advice has been provided without reference to your investment objectives, financial situation or needs. If the advice relates to the acquisition of a particular financial product for which an offer document (such as a product disclosure document) is available, you should obtain the offer document relating to the particular financial product and consider it before making any decision whether to acquire the product. Past performance does not necessarily indicate a financial products’ future performance. To obtain information tailored to your situation, contact a financial adviser.</span>
Themes & Issues
Society
Environment
<span class="text-size-xxsmall">For RIAA’s definitions of the themes included and issues avoided, please view this guide. Product-specific exclusion criteria and practices may vary. You can find these by referring directly to the product provider.</span>
Overview
It is AIM’s belief that investments should deliver not onlystrong financial performance, but also solutions to theworld’s most pressing environmental and social challenges.
AIM’s investment philosophy is based on three corecommitments:
- A focus on fixed income investments that are designedto generate positive environmental impact andsocial benefits.
- Fundamental fixed income discipline with no compromiseon returns.
- Transparent impact reporting.
AIM’s investment approach is to take an active managementapproach with a strong risk discipline. AIM seeks to addfinancial alpha as well as a positive environmental and/orsocial impact.AIM’s investment universe encompasses green, socialand sustainability bonds. The verification process is one ofpositive selection to identify and verify issues and issuersthat deliver a meaningful and measurable impact. AIMinvests in bonds that fulfil its sustainability criteria, whichcovers a broad range of factors such as credit worthinessof the issuer, environment/social benefits and ability todetermine that proceeds are dedicated to positive impact.While AIM’s universe is wider than green bonds, greenbonds currently represent the most significant portion ofAIM’s investable universe. Green bonds are conventionaldebt instruments that fund projects that help theworld mitigate or adapt to climate change. Mitigationreduces and stabilises greenhouse gas emissions, e.g.renewable energy and low carbon transition, whileadaptation helps communities and ecosystems adjust tonew climate extremes, e.g. resilient infrastructure andwater management.Issuers of green bonds include governments, supranationalentities, municipalities and corporations. Green bondissuance has experienced rapid growth in recent years,which is particularly evident within the labelled greenbond universe.Investors in green bonds do not need to compromise oninvestment returns as, to date, green bonds have equivalentyields, credit-rating standards and debt recourse terms asconventional bonds. AIM also invest in bonds that are notlabelled as green bonds, such as issuers whose businessin its entirety meets AIM’s criteria for impact.Other types of bonds in AIM’s universe include social bonds,where the proceeds are used to promote social impactssuch as immunisation, gender equality or financial inclusion,and sustainability bonds, which fund projects committedto both social and green sectors, e.g. building resilientcommunities and economies. From a risk and returnperspective they are conventional bonds, as compared to‘social impact bonds’ (SIBs) which are ‘payment for outcomesecurities’ where the coupon and/or the final maturity arelinked to the performance of a programme.
Description
The fund’s investment approach is based on three core commitments; fundamental fixed income discipline with a consistent focus on returns, a focus on fixed income investments that generate positive environmental and social impact, and transparent impact measurement and reporting.
MIM seeks to achieve the objective of delivering mainstream fixed income returns with an environmental or social impact by combining a dedicated and independent impact verification team with experienced fixed income investment professionals. The strategy invests in bonds whose proceeds are committed to projects that help mitigate and adapt to the impact of climate change or help create positive social and environmental impacts. The verification process includes sustainability and credit assessments at both the issue use of proceeds, and issuer level, and uses positive selection to identify and screen both issues and issuers for meaningful and measurable impact.
An important component of the investment approach is to deliver transparent impact reporting. This allows clients to monitor, on an annual basis, the impact their investment has made on the environment and society along with the financial return. The annual strategy Impact Report details the independent assessment of portfolio-level KPIs, greenhouse gas emissions reduction and intensity, portfolio alignment with UN Sustainable Development Goals, along with other key metrics and projects funded.