Strong demand for responsible investing in NZ
Responsible investment has tripled in New Zealand over the last five years to NZ$188 billion, accounting for 72 per cent of total assets under management.
According to the latest Responsible Investment Association of Australasia (RIAA) benchmark report, responsible investments accounted for 72 per cent of total assets under management for NZ fund managers.
At the end of 2013, responsible investment was only NZ$58 billion but this has since risen to NZ$188 billion as of this year, representing 72 per cent of NZ’s total NZ$261 billion fund management market.
This compares to less than half of the market in Australia, at 44 per cent of total AUM.
As to how responsible investment policies were implemented in NZ, the RIAA said managers used negative screening primarily followed by ESG integration with the most common screens being for weapons and tobacco followed by gambling, adult content and fossil fuels.
The RIAA also pointed to the events surrounding the recent mass shooting in Christchurch as highlighting the relevance of responsible investing where the responsible investment community responded decisively to rule out investments in weapons.
Simon O’Connor, chief executive of the RIAA, said: “Over the last year, we’ve seen responsible investment practices continue to mature as the focus shifts beyond avoiding investing in the most harmful industries, to seeking out investments that contribute positively to New Zealand communities and the planet, alongside delivering better financial outcomes.
“The latest figures reflect a wider understanding that responsible investing is the foundation of good investment practice. The majority of investors believe that the number one driver of market growth is the strong financial performance of investments that consider environmental, social and governance factors.”
AUTHOR
Laura Dew
Recommended for you
Index provider MSCI has unveiled two measures to make it easier for financial advisers and wealth managers to access transparent insights into private assets.
Vanguard has announced a strategic alliance with two US alternative asset managers to develop multi-asset solutions for financial advisers which combine public and private markets.
Clime Investment Management has enacted a range of growth initiatives to boost the firm’s reach with wholesale investors and a new approach targeting the retail market.
Generation Development Group, parent of Generation Life, has entered the ASX 200, having grown its funds under management to almost $4 billion.
