In the evolving landscape of Responsible Investment, climate-related claims have become a focal point for scrutiny. From net zero targets to carbon intensity disclosures, the market is demanding accountability over ambition. RIAA’s Certification Program has responded by clarifying its expectations and introducing guidance to ensure that climate-related claims are not only credible but also verifiable.
Between 2020 and 2024, 5.7% (AU) and 7.6% (NZ) of all product uplifts required through certification were related to climate-related claims. While these numbers may appear modest, the significance of their context is unmistakable. As regulatory pressure and investor expectations intensify, the bar for climate accountability is being raised.
Table 1: RIAA Certification Program trends – climate-related claims conditions by year
The upward trend reflects a shift from voluntary ambition to structured accountability. In late 2024, the Certification Program introduced a Climate Claims Annex to its Guidance Note – Product Labelling, designed to guide product issuers in substantiating such claims. It draws on precedent decisions, market expectations, and regulatory guidance.
What the Certification Program requires
The Program requires that products substantiate their climate-related claims with clear and consistent evidence. Products must disclose how they address fossil fuel exposure, carbon intensity, net zero targets, and climate transition strategies. Claims must be backed by credible methodologies and be demonstrably integrated into investment strategies, processes, stewardship, and holdings. Products must also reflect these claims accurately across public disclosures.
What we found
The most common issues:
- Fossil fuel exposure: products claimed to exclude fossil fuels but held companies with direct or indirect ties to oil and gas exploration or infrastructure
- Unsubstantiated metrics: some providers referenced proprietary ESG scores or carbon intensity thresholds without explaining the methodology or providing supporting data
- Portfolio misalignment: in a few cases, holdings appeared inconsistent with stated exclusions or sustainability themes, particularly where companies were transitioning but not yet aligned with net zero pathways
- Outdated or incomplete disclosures: certification directory listings had not been updated to reflect recent fund name changes, mergers, or updated exclusion policies
- Assessments also revealed that some products claiming to be “low carbon” or “net zero aligned” held high emitters without adequate disclosure or justification
In response, the Program required issuers to update thresholds, revise disclosures, clarify methodologies, and in some cases, remove or reframe claims.
Table 2: RIAA Certification Program trends – common climate-related claims conditions by issue of concern
Country nuances
Australian superannuation and managed funds were more frequently found to have climate-related claims discrepancies. In Aotearoa New Zealand, KiwiSaver products showed stronger alignment with climate frameworks but faced challenges in substantiating net zero pathways.
Table 3: RIAA Certification Program trends – breakdown of climate-related claims conditions by product type
Why this matters
Climate-related claims can no longer be aspirational. They are now a litmus test for credibility. Investors want to know not just what a product aims to achieve, but how it plans to get there. RIAA’s Certification Program is helping to ensure that climate-related claims are aligned with product strategy and communicated with integrity.
As the market moves from ambition to action, certification is playing a critical role in holding the line.
