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ESG investment up 13 per cent: RIAA

Assets under management (AUM) that integrate environmental, social and governance (ESG) principles increased to $153 billion in 2013, the Responsible Investments Association of Australia (RIAA) has found.


At the launch of the RIAA's annual benchmarking report in Sydney yesterday, RIAA chief executive Simon O'Connor said the growth reflected underlying consumer demand for more responsible investments.

Australian and New Zealand investment in 'core' responsible investment – defined as ethical, socially responsible, community finance and sustainability-themed investment – grew year-on-year by 51 per cent to just over $25 billion in AUM, the report found.

Assets managed responsibly in New Zealand increased by 20 per cent to reach just over $27 billion in AUM – representing 40 per cent of total AUM in New Zealand.

"Specialist responsible and ethical financial advisers continue to grow the assets they manage on behalf of clients, with just under $1 billion managed by 21 firms surveyed for," said the report.

The report also claims to have "again put to bed the old-fashioned myth that responsible investments are the underperforming younger brother of mainstream
investments".

Core responsible investments outperformed the ASX 300 over one, three, five and 10 years, said the report.

"Core responsible investment international equities funds have outperformed the MSCI index and large cap International equities fund average over five and 10 years, but have underperformed over one and three years," it said.

"Core responsible multi-sector growth funds (balanced funds) have outperformed the mainstream fund average over one, five and 10 years, with slight underperformance over three years," said the report.

 

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