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SRI asset growth in Australia and US outstrips mainstream market

Benchmark reports from local responsible investment associations reveal boost in take-up.

The rate of asset growth into SRI-related strategies is outstripping the broad market growth of mainstream investment funds, according to two new surveys looking at Australia and the US. In Australia, the 2010 Benchmark report by the Responsible Investment Association Australasia (RIAA), which covers the financial year to June 30, 2010, said managed responsible investment portfolios rose by 10% from AU $14.02bn to AU $15.41bn, beating growth in the broader market of managed portfolios which rose 9% in the same period. The RIAA report said that a broader ‘core’ responsible investment market measurement (a combination of specialised managed funds, community finance, green loans, RI charity investments and financial adviser portfolios) had risen 13% from AU $16.15bn to AU $18.19bn. Over half all funds under management in Australia are now signed to the United Nations backed Principles for Responsible Investment (PRI). The RIAA report said there had been a rise in Australian PRI signatories of 29% during 2009, with 112 Australian signatories running assets of US $591bn now representing 14% of the PRI global signatory base. Significantly, the RIAA report said Australian RI funds had outperformed average mainstream funds over one, three, five and seven years for Australian shares and international shares. In the US, the 2010 edition of the Social Investment Forum Foundation’s (SIF) Report on Socially Responsible Investing Trends in the UnitedStates, reported that from the start of 2007 to the end of 2009, assets in sustainable and socially responsible investing increased by more than 13% from $2.71 trillion to $3.07 trillion. The report classifies SRI-related strategies as ESG integration in investment, filing or co-filing of ESG-related shareholder resolutions, and deposits or investments in banks, credit unions, venture capital funds and loan funds for community investing. SIF said that in the same period, mainstream professionally managed assets increased by less than one percent. SIF said US assets physically managed under policies that explicitly incorporate environmental, social and governance criteria into investment analysis and portfolio construction were valued at $2.51 trillion. Of these, $691.bn were identified within specific investment vehicles managed by money managers, while at least $2.03 trillion were identified as owned or administered by institutional investors. The assets and numbers of US fund vehicles tracked as incorporating ESG criteria rose 90% since the last SIF study conducted in 2007—from 260 to 493—and their assets increased by 182% from $202 billion to $569 billion. The forum said that almost one out of every eight dollars under professional management in the US today is now managed according to SRI criteria: 12.2% of the $25.2 trillion in total assets under management tracked by Thomson Reuters Nelson.
Link to RIAA
Link to US SIF