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It’s good news week.

If there was ever any doubt that responsible investing is here to stay, debate has been put firmly to rest with the impressive results of three industry benchmarking reports published by RIAA this July and August.

In Australia, responsible investment has hit a major milestone in 2018, with RIAA’s Responsible Investment Benchmark Report Australia 2018 finding that over half of all professionally managed investments in Australia are now invested responsibly. In New Zealand, the news is equally encouraging with the vast majority of professionally managed investments now invested as responsible investments, with total assets under management having more than doubled in just two years. 

Consistent with this growth, investments that deliver positive social and environmental impact alongside a financial return are on the rise.  RIAA’s Benchmarking Impact: Australian Impact Investment Activity and Performance Report 2018 shows that the Australian market for impact investing quadrupled between 2015 and 2017, and is delivering positive financial returns for investors while also benefiting the environment and impacting the lives of tens of thousands of people through employment pathways, education, and health services among other activities.

We hope you enjoy this edition of RIAA Window.
 
NEW REPORTS
Responsible Investment Benchmark Report Australia 2018 

RIAA’s 17th Responsible Investment Benchmark Report 2018 Australia has revealed an industry hitting new heights with $866 billion now managed as responsible investments, representing 55 per cent of all professionally managed assets in Australia, up from $622 billion in 2016.

Environmental, social, corporate governance and ethics considerations now sit alongside financial as critical components informing the investment decisions of the majority of Australia’s professional investors.

The 2018 Benchmark Report, supported by Australian Ethical, AXA Investment Managers, BT Financial Group and Pengana Capital, showed that ‘Core’ Responsible Investments using negative or positive screening, sustainability themed investments, impact investing and community finance have reached a record level of $186.7 billion, representing 12% of all professionally managed assets and more than tripling between 2015 and 2017. 

“Nearly two decades of progress in responsible investment has this year reached an important tipping point, which we believe will only gain further momentum in light of growing calls for transparency and accountability across finance along with a growing consumer demand for investments that align with their values,” said RIAA CEO Simon O’Connor.
Responsible Investment Benchmark Report New Zealand 2018 

Responsible investment in New Zealand has hit a major milestone, with RIAA’s Responsible Investment Benchmark Report 2018 New Zealand finding the vast majority of professionally managed investments are now invested as responsible investments, with total assets under management having more than doubled in just two years.  NZ$183.4 billion is now managed as responsible investments, up from $131.3 billion in 2016 and $79 billion in 2015. Growth of 40% year on year.

“The single most significant driver of growth in responsible investment is coming from the demand and desire from clients to align investments to their values - which we can track to the 2016 revelations of many KiwiSaver funds being invested in weapons and tobacco,” said Simon O’Connor. “In that short amount of time, we have seen nearly the entire investment industry move to put in place a responsible investment approach, from 2.5% of the industry two years ago. In 2017 we have seen a move by investors to go beyond just screening out harmful industries, to a more proactive approach to responsible investing, driven in large part by a growing understanding that a responsible investment approach delivers better investment outcomes.” 

The 2018 Report was supported by Australian Ethical, AXA Investment Managers, NZ Super Fund and Pengana Capital.
Benchmarking Impact 2018

In July, RIAA launched Benchmarking Impact: Australian Impact Investment Activity and Performance Report 2018 in partnership with the Centre for Social Impact (CSI) at Swinburne University.

The report presents the findings from analysis of impact investment activity and performance for a data-set of 51 Australian impact investment products active at 31 December 2017, with a total product value of $5.8 billion (more than quadrupling from $1.2 billion at 30 June 2015).  

“The report reveals a diverse market delivering positive financial returns for investors while also benefiting the environment and impacting the lives of tens of thousands of people through employment pathways, education, and health services among other activities” said Simon O’Connor, CEO of RIAA. 

The reported social and environmental impacts of investments are diverse and include: 700 vulnerable families assisted, 369 employment pathways or jobs created; 22,688 students supported; 1,069 clients receiving health and well-being services and 950 megalitres of water delivered to wetlands, creeks and ecosystems.

Benchmarking Impact 2018 is the follow up to the pilot study published by Impact Investing Australia in 2016 and is the primary source of market-based data on the composition, growth and performance of Australian impact investment products. The report was supported by Impact Investment Group.
 
BUILDING A SUSTAINABLE FINANCE SYSTEM FOR AUSTRALIA AND NEW ZEALAND
Finance sector commits to develop Sustainable Development Roadmaps 
 
In July, over 300 people came together in Sydney for the 2018 United Nations Environment Programme Finance Initiative (UNEP FI) Conference, aimed at challenging the financial services sector to do more to create a more sustainable future.

At the end of the Conference, finance sector organisations – including banking, insurance and investment industries, representing over 300 institutions with $10 trillion in assets – released a joint statement in support of a sustainable financial system for Australia and New Zealand.  Signatories include RIAA, the Investor Group on Climate Change, the Principles for Responsible Investment, the UN Environment’s Principles for Sustainable Insurance, and the UN Environment Programme Finance Initiative.

The Joint Statement in Support of a Sustainable Financial System for Australia and New Zealand calls on organisations across the finance sector to support the development of Sustainable Finance Roadmaps for Australia and New Zealand. A Sustainable Finance Roadmap is a set of recommendations across policy, regulation and finance practices that helps the finance sector contribute systematically to a more resilient and sustainable economy.  

The Sustainable Finance Roadmaps build on RIAA’s work to date identifying key priorities for shaping more sustainable finance markets in Australasia, as outlined in our paper: Driving Long-term Investment and Delivering Responsible Financial Markets. You can read the RIAA’s briefing paper on Sustainable Finance Roadmaps produced for the conference here.  

If you are interested in supporting the Joint Statement get in touch with the RIAA team here.
 
EVENTS
RI New Zealand 2018 Conference
18 September, Auckland
This full-day event brings together New Zealand’s responsible investment community and is not to be missed.

RI Australia 2018 Conference: Rediscovering Purpose in Finance
31 October & 1 November, Melbourne
The annual gathering for the community of responsible, ethical and impact investors in Australia; this is RIAA’s flagship event.
 
HUMAN RIGHTS WORKING GROUP
RIAA has recently formalised an agreement with the Workforce Disclosure Initiative to be the Australian representative of this global initiative that brings institutional investors together to strengthen comparable workforce reporting from listed companies on an annual basis and thereby get better 'S' reporting out of Australia's ASX50 companies. 

The Workforce Disclosure Initiative (WDI) is modelled on the CDP (Carbon Disclosure Project), and builds on existing reporting standards, to cover issues such as workforce composition, stability, training and development, and supply chain structure and relationships. RIAA is asking its institutional members to sign on in support of the WDI (head here to find out how), and we'll then be convening some collaborative engagements with ASX50 companies over coming months to drive better disclosure.   
 
RIAA’s Benchmarking Impact 2018 is essential reading for understanding the developing impact investment market in Australia. With nearly $6 billion of capital now being put to work to deliver a better society and environment through impact investing, we are now getting an insight into the potential of capital markets as a force to be harnessed for achieving a more prosperous and sustainable Australia.

In July, the Impact Investment Forum hosted the popular ‘Investing to achieve the SDGs’ webinar, hearing from local and global leaders around how the UN’s Sustainable Development Goals are being integrated into their organisation’s business and investment frameworks. If you missed this webinar and are a RIAA member, get in touch to find out how you can download the slide or watch the webinar again.

As momentum around impact investing continues to build in both markets, we are excited to be putting impact high on the RI Australia and NZ conference agendas with a range of inspiring international and local leaders featuring, as well as supporting the Impact Investment Summit Asia Pacific.
 
CORPORATE ENGAGEMENT WORKING GROUP
RIAA’s Corporate Engagement Working Group continues to meet regularly to discuss current ESG engagement issues underway, assisting to drive some collaborative engagements, and including briefings by groups with timely and relevant information on ESG issues. We were recently briefed by CAER on its report for ACCR on the gender pay gap, by members of the group on the recent ASIC report on proxy advisers, and on the ASX's draft next edition of the Corporate Governance Principles and Recommendations to which RIAA made a submission. The Workforce Disclosure Initiative will also become a strong focus for this group.
 
MEMBER PROFILE – Ethical Investment Services (EIS)
Ethical Investment Services (EIS) is one of Australia’s longest-standing financial planning firms, specialising in offering advice to clients who choose to invest ethically.
Celebrating its 30th year of operation this year, EIS has played a pioneering role and continues to be an instrumental group in the promotion of ethical investing in the Australian financial services landscape. With clients including individual investors, SMSFs, charitable trusts and not-for-profit organisations, RIAA spoke with CEO Michelle Brisbane about how EIS’s journey tracks the growth of ethical investing in Australia.
 
WELCOMING NEW RIAA MEMBERS
RIAA’s membership continues to grow and we now have over 230 members today who combined, manage over $9 trillion in assets globally. We welcome our newest members:
 
  • Harbour Asset Management
  • BayTrust
  • Acadian Asset Management
  • JB Were
  • TSB Community Trust
  • Lutheran Super
  • WEL Energy Trust
  • Vanguard Investments Australia
  • Cameron Hume Limited
  • Shannon Pedrotti (Individual)
  • ARA Consultants
  • Ian Gillies
 
Interested in joining RIAA? See our membership guide here, or info@responsibleinvestment.org
 
NEW RIAA CERTIFICATIONS
As at August 2018, RIAA’s RI Certification Program boasts over 150 investment options from 48 providers, as well as 22 financial advisers and two dealer groups, across Australia and New Zealand.
 
The following products have been updated for the Certification Program:

BNP Paribas Asset Management:                             

Mercer NZ:     

VanEck:

Future Super is now certified Future Super - Whole of Fund. It is the 4th superannuation fund to receive this high level of certification alongside Australian Ethical, Christian Super and Local Government Super.

You can find the full list and more detailed information about each certified product and fund at Responsible Returns, RIAA’s dedicated consumer portal for finding certified responsible investment opportunities.
 
MEMBER AND OTHER EVENTS
Climate Bonds Initiative:
Australia and NZ Green Infrastructure Investment Opportunities Forum 
28 August, Sydney (main event) Register here
30 August, Melbourne (roundtable) Register here
31 August, Auckland (roundtable) Register here

Australia and NZ’s low carbon transition will provide extensive opportunities for institutional investors looking to increase portfolio exposure to green and ESG related investment. Join a new discussion on what the future holds for green infrastructure.

The Climate Bonds Initiative - in partnership with ANZ, CBA, Macquarie Group, NAB, Westpac and the CEFC, and event partners Ashurst, BNZ, IFM Investors, IGCC, Mayne Wetherell, Norton Rose Fulbright, PRI and RIAA - will be launching two major new reports: Green Infrastructure Investment Opportunities - Australia & New Zealandand State of the Green Bonds Market - Australia & New Zealand 2018 at these events in Sydney, Melbourne and Auckland.

Impact Investment Summit Asia Pacific
7-9 November, Sydney

The Impact Investment Summit is widely regarded as the peak thought leadership forum for the impact investing community, with a vision to catalyse the market building efforts of pioneers across the Asia Pacific region. This year’s theme is Wisdom, Courage, Action.  As a partner of RIAA’s Impact Investment Forum, RIAA works together with Summit to jointly bring key speakers to the Australia to share their insights with our audiences. The Summit is pleased to offer RIAA Members 10% off all ticket prices to the Summit, please head here to learn more and use the discount code: ‘RIAA’ at the registration page
Responsible Investment Association Australasia
Level 9, 387 George Street, Sydney NSW 2000 Australia
+61 2 8228 8100
info@responsibleinvestment.org

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