Page 11 - AsiaElec Week 35 2021

AsiaElec ESG AsiaElec

ESG investment grows in

Australia in 2020

AUSTRALIA AUSTRALIAN investment in ethical investment ESG integration, compared to just 41% in 2019.
funds rose by 30% in 2020 to A$1.28 trillion With a rise in the claims of greenwashing,
($940bn), as ESG capital flows took a 40% share the report shows that investment managers are
of invested funds. improving accountabilities by better evidencing
New investment in non ESG funds fell by 11% how they are engaging with companies and vot-
to $1.091 trillion ($801bn), a report from the ing on ESG issues, as well as communicating the
Responsible Investment Association Australasia real-world outcomes of their investments.
(RIAA) and KPMG said. In 2020, 31% reported on both activities
Climate change was the most prominent and outcomes from corporate engagement and
sustainable investment theme among its survey shareholder action (an increase from 21% in
respondents, the RIAA report said With ESG 2019).
now accounting for 40% of Australia’s profes- The report found that investment managers
sionally managed capital, up from 31% in 2020, in Australia were matching consumer interest.
and growing at 15 times the rate that overall Managers now screen a larger proportion of
Australian professionally managed investments assets under management using negative screen-
have grown, people are rapidly becoming more ing for exposures to fossil fuel producers (22%).
engaged with their money, said Nicolette Boele, This is followed by tobacco (19%), and weapons
the policy and standards executive for RIAA. and firearms (14%).
“Investment managers committed to respon- The findings mirror wider global progress
sible investment and leading practice are seeing on ESG. Sustainable investments have reached
money moving across into their funds, while $35.3 trillion in assets under management, now
those with ineffective policies and poor pro- equating to 36% of all professionally managed
cesses are being left behind as the capital moves assets, the Global Sustainable Investment Review
out” said Boele. 2020 said.
“The message for investment managers is Looking ahead, investors need to take a long-
clear. It’s not good enough to simply claim you’re term attitude, the report said.
investing responsibly. If you’re not doing it well, “The big challenge for the maturing Austral-
then there’s a high risk of losing business,” she ian responsible investment market is to improve
added. the evaluation and reporting of sustainability
The report found that ESG integration was outcomes. Increasingly responsible investment is
becoming a foundation of prudent investment being defined not just by the strategies involved,
management. but by the short and long term social and envi-
In 2020, 57% of investment managers have at ronmental impacts that investors are targeting
least 85% of their assets under management cov- and generating through their responsible invest-
ered by an explicit and systematic approach to ment approaches,” said Boele. ™

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