More Money Going to, And Being Earned From, Responsible Investing
27 July 2016: A significant sum of New Zealand’s capital is now being invested responsibly - totalling $78.7 billion - with early
signs showing consumer demand is increasingly following this rise that has resulted in billions shifting from mainstream
to responsible funds.
The new report launched today by the Responsible Investment Association Australasia (RIAA), shows this strong up take of responsible investment, from the largest institutions through to boutique funds
and KiwiSaver products, is not only benefiting New Zealanders by underpinning strong investment strategies that deliver
strong returns, but also contributing to a better environmental and social outlook for New Zealand.
“In observing the significant and consistent growth in responsible investment we can say without a doubt that this isn’t
just a passing trend, but an evolution of the entire sector that is now being driven strongly by the acknowledgement
that investments perform better when they are investing in more sustainable companies and assets,” said Simon O’Connor
Chief Executive of RIAA.
“Years of demonstrated long-term investment benefits to investors, who consider environmental, social and governance
(ESG) factors, have quietly shifted a significant portion of the investment industry to invest responsibly. Now, the
early signs are that consumer demand is taking off with implications for all parts of the finance sector across
advisers, banks, KiwiSaver providers and beyond,” said O’Connor.
In further good news from the sector, investors who have embraced the evolution have reaped the rewards with responsible
investment outperforming and returning greater benefits than their mainstream peers over the last one, three, five and
10 years, as reported in the companion Australian report.
“This strong performance highlights the opportunities to invest ethically and responsibly. You can invest with
confidence, aligning your money with your morals, and it’s not just a ‘well-intentioned’ philanthropic approach, it is
generating great returns for savvy investors,” continued O’Connor.
The 2016 New Zealand Responsible Investment Benchmark Report also found:
• Total assets managed under responsible investment strategies has grown by 28% in the last year to reach $78.7
billion
• This is lead strongly by the large crown financial institutions of NZ Superannuation Fund and the Accident
Compensation Commission, along with some leading fund managers and community trusts implementing a ‘broad’ responsible
investment strategy of ESG integration, reaching $77.1 billion
• ‘Core’ responsible investment - that part of the market most closely representing an ethical and socially
responsible investment (SRI) approach, and including retail offerings – grew strongly by 17% to reach $1.6 billion in
assets under management
• This part of the market – although starting from a small base - best reflects consumer demand for responsible
and ethical investment and has shown some strong flows of funds in the last year into those providing ethical or
socially responsible retail products, including KiwiSaver products
With this continuing growth, responsible investing is becoming much more sophisticated in its approach, with greater
numbers of investors using multiple responsible investment strategies, with negative screens ever more common, alongside
ESG integration, active corporate engagement and voting, as well as sustainability themed funds, an approach seen
globally and strongly represented by some of NZ’s largest investors.
“As we can see from the report, responsible and ethical investment is now a mainstream part of the financial sector and
ever more clearly the benchmark of good investment practice.” concluded O’Connor. Full copy of the report can be found
here: www.responsibleinvestment.org/resources/benchmark-report/
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