What are the benefits of RIAA Certification for indices?
RIAA certification is the longest running responsible investment program in the world, recognised by investors, financial advisers and consumers across the region, providing confidence that a product, service or adviser is delivering on their responsible investment promise and meeting the Responsible Investment Standard. It attracts advisers and investors. RIAA works diligently to achieve close alignment with the expectations of regulators in Australia and New Zealand in relation to greenwashing.
Leveraging on the 20+ years experience in financial products and services certification in Australia and New Zealand, RIAA certification ensures an index’s methodology and data governance processes are rigorous, fit for purpose and able to support the development of financial products of different RI approaches.
Index users can be assured that the certified indices’ methodologies are independently verified by RIAA as true to label, have taken ESG factors into their construction, and its constituents align with the RI objective or tilt the index has aimed to achieve at the time of certification.
Benefits include:
Stand out in the market
Certification signals leadership in responsible investment, setting your index apart with trusted third-party validation.
Build trust and credibility
Independent verification provides index users with confidence that methodologies and responsible investment claims are robust and transparent.
Attract institutional investment
Certified indices gain stronger visibility with institutional investors, supporting increased recognition and potential capital flows.
How will certified indices be promoted?
Certified indices will be listed on the RIAA website and the list will be shared with relevant industry stakeholders on a regular basis. Providers with certified indices may also promote their certification through their own communications and marketing channels in line with their licensing agreement.
What is the relevance of RIAA certified indices for financial product providers and consumers?
When using certified indices in product construction, asset owners, fund managers and financial product providers can gain an additional layer of confidence from the external validation provided by RIAA Certification, knowing that index methodologies have been independently verified by RIAA as true-to-label and have meaningfully considered ESG factors in their construction.
Are products derived from a RIAA certified index automatically certified?
No. The assessment of products is different to the assessment of indices. Products derived from a RIAA Certified index must achieve certification on their own merit.
Products wishing to achieve certification and use the certification symbol, even when using a certified index, must undergo an independent assessment process to test their own practices, processes and disclosures against the requirements of the Responsible Investment Standard. For example, financial products must fulfill stewardship criteria and specified disclosures, which are not required for indices. RIAA assesses the primary documentation (legal, process and marketing collateral) of the financial product seeking certification.
RIAA also conducts sequenced due diligence checks on product claims against portfolio holdings of financial products during the certification term.
To conduct this check, the RIAA Certification team runs the product’s most current portfolio holdings through research partner screens, and reviews the financial statements of flagged holdings, to establish what, if any, risk there is to the product provider and the Certification Program. This due diligence check is an important risk mitigant for certified products.
