Leaders across Australia’s investment industry are converging on Darling Harbour in Sydney on today for the largest regional gathering focused on responsible investment, with 250 people to be hosted by the Responsible Investment Association Australasia.
Today, 30% of the world’s professionally managed assets – $US21 trillion – and 50% of total assets under management in Australia, are invested under responsible investment strategies.
Many of our largest investment organisations now systematically assess environmental, social and corporate governance (ESG) issues as a key part of their investment decision-making process.
To date, this strong uptake of responsible investment has been driven largely by the numerous examples of companies damaging their share price due to mismanaging issues traditionally deemed “non-financial”.
Simon O’Connor CEO of RIAA said, “What BHP Billiton’s recent tailings dam failing at the Samarco Mine in Brazil shows us all too clearly is that that issues such as safety and environment are continuing to drive valuations of companies, and unfortunately more often on the downside than the upside,
Off the back of the recent Volkswagen emissions scandal, that has wiped out 60% of their share price, we see all too frequently examples as to why leading global investors are analysing, rating, reviewing and engaging with companies on a daily basis based on issues that in the past were seen as ‘soft’ or on the margins. These ESG issues are increasingly central to good investment outcomes.”
Over the past 5 years, the growth in uptake of responsible investment has been driven by this ever stronger evidence that ESG factors result in better informed investment decisions.
At today’s conference, RIAA will set out the case for the next five years of growth that will see the rise in demand for responsible investment products.
“What we anticipate is a sharp rise in the number of Australians who are engaging much more deeply and regularly with the way their retirement savings are invested, with a focus on the contribution their investments are having to shaping the world they will retire into,” said O’Connor.
“Building on the trend of the last two years where we have seen a rapid emergence of consumers demanding that their retirement savings are invested and banked in line with their own values, we conclude that what we are heading towards is nothing less than the democratisation of capital,
This will result in consumers taking a much more active interest in how their money is invested, enabled by technology, social media, NGOs harnessing their members on important issues, and the rise of Gen Y” concluded O’Connor.
To learn more about RIAA and their conference click here.