Australian Ethical Investments has welcomed today’s announcement by the Responsible Investment Association of Australasia (RIAA) to make its certification program more robust, saying it will help consumers cut through the clutter of responsible investment.
RIAA, the peak body for responsible investments, has revised and strengthened
its Responsible Investment Certification Program, designed to help consumers choose an investment option that suits their needs.
The refreshed certification program has an increased focus on the internal governance, program requirements, criteria and verification processes of responsible funds. Announcing the update, RIAA also revealed it has awarded Australian Ethical the new ‘Whole of Fund Certification’ – the highest level available.
Phil Vernon, Managing Director, Australian Ethical, said, “Australians are increasingly embracing ethical investing, which we saw reflected in our own business results announced last week. Over the course of 2015, our funds under management grew by 35%, inflows doubled and super fund membership grew by 11%. This was in the context of strong investment performance, with all of our key funds reporting top quartile performance.”
However, with the rise in popularity comes a proliferation of responsible investment products in the market, making it harder for consumers to choose.
“Super funds and asset managers are responding to the demand for responsible investment options, but there is a wide variation among the products on offer. Terms like ‘green’, ‘ethical’, ‘SRI’ and ‘ESG’ can mean different things, and unless they are certified, it’s hard for investors to compare apples with apples.
“The RIAA Certification awarded to Australian Ethical is the most robust available. We are one of only three super funds to receive certification across the whole fund, meaning ethical investment practices are embedded in our DNA. As the range of responsible investment products grows, it’s important to have external validation of claims to be ethical or responsible. It gives consumers certainty about where they are investing their money,” Mr Vernon said.
To attain Certification across the entire superannuation fund, Australian Ethical has been required to demonstrate leading practices to integrate responsible investment, specifically: apply at least two responsible investment strategies across the fund; with at least 75% of the assets under management under clearly defined responsible investment strategies; disclose their full portfolio holdings; systematically apply other active ownership strategies including engagement and proxy voting; and actively contribute to advocating for more responsible financial markets. Australian Ethical applies the 23 principles of its Ethical Charter to rigorously test the social, animal and environmental impact of all its investments.
“A rapidly growing number of Australians are using their choice of super to advance both a sustainable future and their best financial interests. RIAA’s Certification Program helps investors make that important choice, and we value their recognition of Australian Ethical’s leadership in investing for people, the planet and our members,” Mr Vernon said.
