Aussie managers with $1bn plus in RI assets jumps from one to seven over the year: RIAA report

So-called ‘core’ RI assets up by half on the year also.

The number of Australian asset managers with a responsible investment portfolio worth more than $1bn has grown from just one to seven in a year, the Responsible Investment Benchmark Report 2014 has found. The report, which is published by the Responsible Investment Association Australasia (RIAA), looks at the size and growth of the responsible investment market in Australia and New Zealand over the 12 months to 31 December 2013. The report highlights what it calls “extraordinary growth in responsible assets under management of the largest asset managers”.
In the 2013 report, only AMP Capital had responsible investment AUM above $1bn. This year, there are seven: AMP Capital, New Forests, Investa Property Group, Perpetual Investments, BT Investment Management, Hunter Hall Investment Management and Generation Investment Management. The growth came on the back of a rise in overall investments in ‘core’ responsible investment that have grown in Australia by 51 per cent year on year to just over $25bn in assets under management as at 31 December 2013, according to the report.
The report defines a core responsible investment approach as screening, sustainability themed investing, impact/community investing and corporate engagement and shareholder action – comprising entirely of Australian Ethical’s Advocacy Funds.RIAA said the responsible investment asset rise and its performance figures: “puts to bed the old fashioned myth that responsible investments are the underperforming younger brother of mainstream investments”. The report shows that core responsible investment Australian equities funds have outperformed the ASX 300 index and the large cap Australian equities fund average over 1, 3, 5 and 10 years.
The report also notes that superannuation funds in Australia are a strong driver of AUM flow into responsible investment portfolios, through their offerings of socially responsible options to their members, and through their strong uptake of ESG integration. The picture in New Zealand is slightly different. Investments in core responsible investments dropped by around 93% from $22.3bn to $1.6bn. Simon O’Connor, chief executive officer of RIAA told Responsible Investor that the change in the New Zealand figures is due entirely to a reclassification of NZ Super from a negative screening fund to an ESG fund.
“The challenge this year has been classifying funds to one distinct category of responsible investments – NZ Super is a case in point, where they undertake ESG integration as their primary responsible investment technique, but also apply negative screening across their fund.”

Link to RIAA’s Responsible Investment Benchmark Report 2014