Report Finds Responsible Investing to be a Finance Sector Priority
10 August 2018 at 5:11 pm
A finance sector leader believes “a major milestone” has been achieved, after a new report revealed more than half of Australia’s professionally managed investments are responsibility invested.
The Australian Responsible Investment Benchmark Report 2018 found $866 billion is now managed as responsible investments, representing 55 per cent of of all professionally managed assets in Australia – an increase of over $200 billion from 2016.
CEO of Responsible Investment Association Australasia (RIAA), Simon O’Connor, told Pro Bono News that Australia was now at a stage where ethical issues sat alongside financial return as “critical components” informing investment decisions.
“Issues such as climate change, human rights, corporate culture, diversity… are right at the forefront of consideration by the Australia’s finance community,” O’Connor said.
According to O’Connor, the sharp increase of over $200 billion from 2016 stems from an “increasing demand” from consumers, and that finance must “align” with their clients’ investment beliefs.
“People are increasingly demanding a more responsible approach to the way their retirement savings and their investments are being managed, so super funds, banks, fund managers, and financial advisors are all hearing much more frequently from Australians,” he said.
Meg Frawley, who recently changed to a an ethical super fund, said even though she tried to minimise her negative impact on the environment on a “day to day” level, knowing where her money was invested was important.
“Where your money is stored actually makes a big impact on the world and I didn’t want my money going towards a mine in the Great Barrier Reef,” Frawley told Pro Bono News.
Frawley said when she researched alternative super funds, the ethical companies were always “upfront and transparent with their messaging”.
“If the company isn’t saying something about it, I pretty much assume they’re doing the wrong things, because if you do the right thing, you tell people,” she said.
O’Connor said the report’s findings demonstrated a “tipping point” in responsible investment which will only gain momentum “in light of growing calls for transparency and accountability” in finance.
He said the “big question” to ask now that data showed investment funds were being managed “responsibly”, is how to make sure they continued on the right path.
“It’s no longer is about just quantity but about quality… ensuring that responsible investors really deliver on the promise of response investment to their clients,” he said.
“We really want to start ensuring that we are able to measure the outcomes of what our responsible investment activities are having and how are we as an industry are contributing to building a stronger economy, a more sustainable and equitable Australia… and the role capital can play in that.”