Responsible Investment Benchmark Report Australia 2022

Australian assets managed using a rigorous, leading approach to responsible investment hit a record value of $1.54 trillion in 2022, now accounting for 43% of the total market, according to a new study by the Responsible Investment Association Australasia (RIAA), researched in collaboration with Ernst & Young.

RIAA’s Benchmark Report is the most comprehensive review of the responsible investment sector in Australia. The 2022 report, the 21st such report, reviewed the investment practices of 140 financial institutions over 2021.

The Responsible Investment Benchmark Report Australia 2022 identified Schroders and 73 other investment managers as Responsible Investment Leaders.

According to the report, Responsible Investment Leaders explicitly and systematically consider ESG factors in the allocation of capital, and are decidedly transparent, reporting publicly not just on their activities to improve environmental and social sustainability, but also the outcomes they achieve.

This number has more than doubled in the past two years, with only 21% of investment managers engaging in such activity in 2019.

This year’s report found that this approach – also known as corporate engagement – saw the greatest increase out of any responsible investment strategy in 2021. Approximately $726 billion in assets under management (AUM) is now being used by fund managers to agitate for change on ESG issues, up 54% from .

Schroders and responsible investing

Schroders has a long history of engagement and active ownership, spanning more than 20 years. Over that time we have influenced significant change, and helped the companies in which we invest improve their environmental, social and governance performance.

Our Engagement Blueprint provides more detail about our six priority engagement themes  - climate; natural capital & biodiversity; human rights; human capital management; diversity & inclusion; and corporate governance. It explains the long-term outcomes we aim to achieve for each theme, alongside the corresponding short- and mid-term actions we are taking.

We also regularly report on the progress of our corporate engagement efforts. Each quarter, we provide updates on the themes that we believe are changing the sustainability landscape; and our annual reports have been created to demonstrate our commitment to integrating ESG factors into our investment processes.

The Schroder Sustainable Growth Fund, our first sustainable multi-asset strategy available in the Australian market, and the Schroder Sustainable Global Core Fund, have each received certification within the Responsible Investment Association Australasia (RIAA)’s Responsible Investment Certification.

Other key trends from the Report

RIAA’s study also indicated excellence in responsible investment materialises into substantial financial returns. In 2021, products certified under RIAA’s Responsible Investment Certification Program, on average, outperformed the market in the medium to long term, and over some timeframes achieved two or three times the returns. This outperformance is seen both when comparing RIAA certified funds to the overall market, and to products of investment managers who self-declare as practising responsible investment.

The report found that investment managers are getting much better at backing up their claims around the sustainability of their portfolios, as they don’t want to find themselves on the wrong side of tightening greenwashing regulation and scrutiny.

Climate change remains a standout focus for investment managers, targeted through negative and positive screening practices as well as a growing number of sustainability-themed loans and investments.

To read the report full report, click here.

Learn more about Schroders’ approach to sustainability, visit one of our Sustainability pages:

Sustainability at Schroders – Institution

Sustainability at Schroders – Advisers

Sustainability at Schroders – Individuals

 

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