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 are the requirements?
In order to certify products as certified responsible investments, RIAA assesses them against its RI Certification Standard. The Certification Standard is underpinned by eight requirements that act as the guiding principles of the RI Certification Program. Since its inception the RI Certification Standard has evolved significantly, reflecting the dynamic evolution of responsible investment. These eight requirements are:
- RI strategies are formal, disclosed, consistent, auditable and fit for purpose
- Labels are clear, honest and not misleading
- Product avoids significant harm
- Discloses full holdings, performance, sustainability outcomes and engagement and voting practices
- Managed by active stewards, and managers can detail the stewardship practices and outcomes
- Organisation has formal commitment to responsible investment
- Organisation provides educational information to members and customers about RI strategies
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
Investment objective | The Fund’s investment objective is to achieve capital growth over the medium to longer termand contribute to positive sustainability impact over this period. |
Significant features
Sustainability Goal
The investment objective of the Fund is to achieve capital growth over the medium to longer term and contribute to positive sustainability impact over this period. For these purposes, contributing to positive sustainability impact (the “Sustainability Goal”) includes:
supporting a stable climate and healthy ecosystems through activities that:
· deliver cleaner energy and avoid the production of greenhouse gases (“GHGs”),
· provide environmental services that reduce the generation of waste and avoid the production of GHGs,
· enable improved resource efficiency in order to avoid the production of GHGs,
· enable sustainable transport that avoids the production of GHGs, and
· enable effective water management through reductions in the use of freshwater and treatment of polluted water.
and enabling more productive and healthy lives through activities that:
· deliver more education,
· deliver improved health through the reduction of both communicable and non-communicable diseases,
· improve safety by making sure products are safe and by directly protecting people from hazards,
· improve well-being for people through preventative care, and
· deliver new and better positive impact technologies related to the above activities.
What the Fund invests in
The Fund invests in companies that produce products and services providing solutions to critical environmental and social problems. These can be split into four areas:
· Supporting a stable climate through greenhouse gas emission reduction,
· Supporting healthy ecosystems,
· Enabling healthy lives, and
· Enabling productive lives.
What the Fund won’t invest in
WHEB reviews the environmental, social and governance (“ESG”) quality of a business as part of the investment process. Based on this analysis, WHEB assess the company’s quality and suitability for the Fund.
If the company is, in WHEB’s view, exposed to excessive reputational risk, or has substantial activity (generally defined as more than 5% of reported gross revenues) in areas that are not consistent with the Sustainability Goal of the Fund, then the company will not be selected for investment. The Fund’s methodology and list of controversial activities that are considered to conflict with the Sustainability Goal is available in the Fund Product Guide under “Ethical Outcomes From Impact Investing”.
If a company no longer delivers a positive impact in line with the Sustainability Goal of the Fund, WHEB will engage with company management to improve this. If the response or subsequent changes are considered insufficient, the Fund will divest.
Approach to stewardship
Process
WHEB engages with the companies the Fund invests in with the aim of accelerating their positive impact, limiting any negative social or environmental impacts and improving business operations.
For each engagement WHEB sets objectives, tracks progress towards these objectives using clear milestones, measures objective outcomes using key performance indicators (“KPIs”), and evaluates the effectiveness of their actions in helping to bring about the desired outcome.
The Fund will ultimately divest from investments which WHEB no longer believe are delivering a positive impact towards the Sustainability Goal.
Investment Philosophy
The Investment Manager’s overarching theory of change is that the Fund’s investments and investment activities (investor contribution) directly contribute to faster or greater deployment of selected products and services that help solve critical environmental and social problems, leading to improved impacts compared with the present circumstances. These can be split into four areas, with some examples listed below.
Supporting a stable climate through greenhouse gas emission reduction
· The Fund invests in companies that generate renewable power such as solar and wind power, and other forms of cleaner energy that replace carbon intensive power generation.
· The Fund helps to make buildings and manufacturing processes more resource efficient by investing in companies that provide automation and control technologies, insulation, energy efficient heating and cooling, and more energy efficient products.
· The Fund invests in companies that make electric vehicles, public transportation systems, and other forms of low impact transport which replace high carbon forms of transport.
Supporting healthy ecosystems
· The Fund invests in companies that recycle and treat waste materials, and that reduce the volume and toxicity of waste materials that enter the natural environment.
· The Fund invests in companies that reduce demand on limited freshwater resources by increasing the efficiency of water use, and by reducing the volume and toxicity of wastewater entering the natural environment.
Enabling healthy lives
· The Fund invests in companies that prevent or treat communicable and non-communicable illnesses, and diseases that contribute significantly to the global burden of disease.
· The Fund invests in companies that support well-being through a variety of preventative care products and services.
· The Fund invests in companies that enable people to stay safe, that ensure products are safe, and that directly protect people.
Enabling productive lives
· The Fund invests in companies that provide education and training, and that supply technologies that improve the quality of or access to education.
Investment Process
The Fund’s investment team builds and maintains a Universe of companies which provide solutions to sustainability challenges and are categorised within WHEB’s nine sustainable investment themes. To qualify for WHEB’s Universe, companies need to have a market capitalisation of at least US$2 billion, and at least 50% of gross revenues (as reported by the companies) directly exposed to WHEB’s themes. This Universe was first established in 2005, is reviewed on an ongoing basis, and includes around 400 to 500 companies.
WHEB selects the best ideas from their Universe for further in-depth fundamental analysis. Ideas are identified through a combination of thematic thinking, which builds a picture of sustainability developments and those companies that can benefit the most from them, and quantitative screens, which are used to identify high quality companies.
Potential investments are then evaluated using a differentiated and systematic approach that integrates sustainability and financial analysis at every stage of the fundamental analysis process:
· WHEB’s proprietary ‘Impact Engine’ assesses the overall impact intensity of products and services offered by companies. It builds on existing market frameworks and is intended to capture the different dimensions of positive impact, including:
1. Importance of outcomes
- How vulnerable is the beneficiary?
- How critical is the outcome to the beneficiary?
2. Change in outcomes
- How large is the impact compared to baseline?
- How widely applicable is the product?
3. Contribution to outcomes
- How central is the product impact in the outcome?
- How unique is the product’s contribution?
· WHEB’s financial analysis assesses the fundamental quality of a company’s policies and operational performance. The analysis considers five aspects of business operations: market attractiveness, competitive position, value-chain operations, management quality, and growth strategy.
Researched companies are given an overall score and considered for investment, as long as the valuation is appropriate for the level of quality determined based on WHEB’s disciplined approach. Position sizes are usually between 0.5% and 4.0% of the portfolio, and all members of the investment team are involved in the monitoring and analysis of the total portfolio. The expected holding period is between 4 and 7 years. Positions are usually sold if they are no longer considered to be attractively valued, if they no longer meet the impact criteria, or if corporate quality or the growth opportunity has changed materially.
The investment process is expected to result in a portfolio which is exposed to structurally growing markets, through companies which have positive social and environmental impacts underpinning this growth. Progress towards the positive sustainability impact objective is measured using sustainability metrics.
Sustainability metrics
The KPIs listed below provide a key measure of the positive impact associated with the Fund and progress towards the Sustainability Goal:
· Tonnes of carbon dioxide equivalent (CO2e) avoided
· Megawatt hours (MWhs) of renewable energy generated
· Tonnes of waste recycled or reused
· Litres of wastewater treated
· Litres of water saved
· Days of tertiary and vocational education
· Number of people treated for communicable and non-communicable diseases
· Number of people with improved well-being
· Value of investments in equipment and services for positive impact research
These KPIs are not definitive, may include qualitative as well as quantitative indicators, and may vary year on year based on the assets held in the portfolio.
Investors in the Fund are aligned with these positive impacts by investing in companies that form part of crucial supply chains that manufacture these products and provide these services. WHEB’s investments contribute to the attainment of the impact, however, are not solely responsible. The impact is therefore referred to as ‘associated’.
We publish an Impact Calculator (updated annually) on our website that allows investors to find the impact associated with their investment.
Engagement objectives and KPIs
The Fund’s Sustainability Goal is to contribute to positive sustainability impact. Investment activities include the investor contribution which is delivered through engagement and stewardship activities. This includes engaging with the management teams of underlying investments with the objective of:
1. Delivering, accelerating and enhancing the company’s positive impact as measured by the relevant KPI for each asset,
2. Limiting any material negative social or environmental impacts,
3. Delivering improvements in the quality of business operations that support the delivery of positive impact as measured by the relevant KPI for each asset,
4. Encouraging reinvestment of profits in further growth and activities (such as research and development) that increase positive impact, and
5. Supporting high quality management that reinforce and extend the company’s overall positive impact and long-term success.
Engagement and Stewardship activities
The Investment Manager uses a series of milestones (“Objective Milestones”) to monitor and evaluate a company's progress during an engagement on the way to the objective being achieved.
The Objective Milestones allow discrete, rather than continuous, measurement and represent the investor contribution process. They are a valuable tool for motivating and focusing investor contribution activities that may span multiple years, and where achieving objectives requires changes in company strategy, policy or governance.