Responsible Investment Benchmark Report Australia 2022
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:
This material has been issued by Schroder Investment Management Australia Limited (ABN 22 000 443 274, AFSL 226473) (Schroders) for information purposes only. It is intended solely for professional investors and financial advisers and is not suitable for distribution to retail clients. The views and opinions contained herein are those of the authors as at the date of publication and are subject to change due to market and other conditions. Such views and opinions may not necessarily represent those expressed or reflected in other Schroders communications, strategies or funds. The information contained is general information only and does not take into account your objectives, financial situation or needs. Schroders does not give any warranty as to the accuracy, reliability or completeness of information which is contained in this material. Except insofar as liability under any statute cannot be excluded, Schroders and its directors, employees, consultants or any company in the Schroders Group do not accept any liability (whether arising in contract, in tort or negligence or otherwise) for any error or omission in this material or for any resulting loss or damage (whether direct, indirect, consequential or otherwise) suffered by the recipient of this material or any other person. This material is not intended to provide, and should not be relied on for, accounting, legal or tax advice. Any references to securities, sectors, regions and/or countries are for illustrative purposes only. You should note that past performance is not a reliable indicator of future performance. Schroders may record and monitor telephone calls for security, training and compliance purposes.