Advisers leading increase in responsible investing
An industry-wide increase in responsible investment practices has been led by a 50 per cent jump in responsibly invested financial adviser-managed portfolios, according to the Responsible Investment Association Australasia (RIAA).
In its 10th annual Benchmark Report, ‘Responsible Investment 2010 — the real facts about the growth and the size of RI in Australia and New Zealand’, the RIAA found there was also a 10 per cent increase in managed responsible investment portfolios and a 29 per cent increase in the number of Australian signatories to the United Nations Principles for Responsible Investment (UNPRI).
The RIAA attributed the increase to disillusionment with traditional investment practices, and said the finding showed that taking environmental, social and governance (ESG) issues into account had become best practice for those looking to improve investment performance.
The jump in ethical adviser portfolios from $972 million to $1.46 billion showed there was an increase in consumer demand for responsible investment products, the RIAA said. Responsible investment had largely outperformed the average mainstream fund over one, three, five and seven years for Australian shares and international shares, according to the report.
More than half all funds under management in Australia are now signed to the UNPRI. The 112 Australian signatories now represent 14 per cent of the global signatory base and have funds under management of approximately US$591 billion, the RIAA stated.
“The 2010 benchmark report figures exemplify the disappointment experienced by more and more people about the inability of traditional financial models to recognise the inherent impact of environmental, social and governance issues on investments,” said the executive director of the RIAA, Louise O'Halloran.
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