Magellan and Hyperion are among 11 new entrants in the Responsible Investment Association Australasia’s (RIAA) list of responsible investment leaders for 2024.
Some 61 Australian asset managers were named as responsible investment leaders for 2024, the organisation announced.
This marks an 11 per cent increase as responsible investing continues to gain momentum, RIAA stated, despite rising scrutiny and regulatory pressure.
Responsible investment leaders are defined as investment managers that exhibit a commitment to responsible investing, explicit consideration of ESG factors in investment decision-making, collaborative stewardship and transparency in reporting activity. They represent the top 20 per cent of investment managers assessed on RIAA’s scorecard.
New entrants this year for Australia include:
- Magellan Asset Management Limited
- Alphinity Investment Management
- Ausbil Investment Management
- Northcape Capital
- ClearBridge Investments
- Paradice Investment Management
- UBS Asset Management
- NorthStar Impact
- Mirova
- Hyperion Asset Management Limited
- Columbia Threadneedle Investments
Other major names that retained their position from last year include First Sentier Investors, T. Rowe Price, Franklin Templeton, Maple-Brown Abbott, Nuveen, Russell Investments, and Nanuk Asset Management.
“It’s incredibly encouraging to see such strong progress, even after raising the standard last year,” commented Estelle Parker, co-CEO of RIAA.
“The fact that more investment managers have met these higher expectations shows that organisations are embracing the challenge and lifting their game. There’s not only more of them doing it – they’re also getting better at it.”
Parker noted that RIAA has seen deeper commitments to responsible investment practices amid heightened regulatory action from ASIC and increased scrutiny of the sector.
For example, Vanguard was penalised $12.9 million by the Federal Court last month for making false or misleading claims about its ethically conscious fund on its website, in a media release, presentation and YouTube interview.
The co-CEO added: “This isn’t about short-term adjustments; it’s about adopting a long-term, whole-of-business approach to building more sustainable and resilient markets.”
Money Management recently explored the challenges that fund managers are facing in regards to their ESG and sustainable funds. Regulatory uncertainty around greenwashing, meeting shareholder obligations, and hiring issues have prompted many firms to reconsider their stance on responsible investment.
However, Dugald Higgins, Zenith Investment Partners’ head of responsible investment and sustainability, reminded the industry: “Transitions are rarely straightforward, and all successes are liable to setbacks. Yes, the current climate presents difficulties for various aspects of funds management, but accepting that we need to ride the cycle is necessary to develop solutions and meet the challenges of the future effectively.”
