The level of responsible investing has risen in New Zealand and Australia according to recent reports from the Responsible Investment Association Australasia (RIAA).
The steep rise of over 2500% in responsible investment within in the New Zealand market, which jumped from $1.6 billion in 2015 to $42.7 billion at the end of 2016, has been driven, the RIAA, said by KiwiSaver providers which have introduced negative screening of multiple issues as part of their management of their pension funds.
Simon O’Connor, chief executive of RIAA said: “This is a staggering increase and is a monumental development for New Zealand’s financial markets. We have never seen a market switch so rapidly to responsible investment. It’s one of the most significant global changes to happen to the sector in 2016 and highlights that New Zealanders are not prepared to build their retirement savings at any cost”.
“Kiwis communicated clearly that they are not willing to make their dollars at the expense of the planet or its people when there are responsible alternatives that outperform. Consumers and investors alike are taking a stance and aligning their investments to their values.”
Meanwhile the analysis of the Australian market found that ‘core’ responsibly invested Australian share funds and balanced multi-sector funds had outperformed their equivalent mainstream funds over three, five and 10-year horizons. The research also found that responsible investments had more than quadrupled over the past three years to $622 billion, with nearly half (44%) of Australia’s assets under management now being invested through some form of responsible investment strategy – from negative screening, impact investing, sustainability themed funds and the integration of environmental, social and governance (ESG) considerations.
O’Connor said: “It is a long out-dated myth that financial returns must be sacrificed to invest responsibly or ethically. The performance figures and trends we are now seeing each year are telling us the opposite story.|
“More and more Australians are wanting their investments and savings to align with their values, and are reaping the rewards with strong financial performance. The market is recognising the opportunities to create value for clients, with a surge in responsible investment products over the past year, including many focused on delivering positive social or environmental impact,.”Last Updated: 6 August 2017