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Responsible Investment Benchmark Report 2018
Responsible Investment Benchmark Report 2018
Responsible Investing (RI) constituted $866 billion Assets Under Management (AUM), up 39 percent from $622 billion in 2016, as at 31 December 2017. The survey found that over 55 percent of all funds professionally managed in Australia are managed under a RI strategy. These are some of the findings from the Responsible Investment Benchmark Report 2018.
The Responsible Investment Association Australasia (RIAA), in conjunction with KPMG, have released a report detailing industry data on the Australian Responsible Investment (RI) market. The 17th annual Australian Responsible Investment Benchmark Report 2018 reinforces that a responsible approach to investing – one that systematically considers environmental, social and governance (ESG) and/or ethical factors across the entire portfolio – is the expected minimum standard of good investment practice in Australia.
The biggest driver of growth in the RI sector is the increasing realisation that ESG integration is linked to improved investment performance, as identified by 44 percent of investment managers.
"One of the key detractors to RI growth has been the perception that RI options underperform the wider market. This report indicates that this is not the case – there is no need to sacrifice performance when investing responsibly. Instead the opposite appears true, with RI driving long-term sustainable value and outperforming equivalent funds." Mark Spicer
"It’s been a slow burn over the past decade, but now ESG is considered an important part of investing well. In the past couple of years it’s really accelerated because we have just seen how relevant these non-financial considerations have become to share price movements." Simon O’Connor |
Key findings
- As at 31 December 2017, RI constituted $866 billion in AUM, up 39 percent from $622 billion in 2016.
- RI represent over 55 percent of total assets professionally managed in Australia – valued at $1.56 trillion.
- Funds implementing core responsible investment strategies are increasingly delivering strong results and outperforming their equivalent Australian and international share funds and multi-sector growth funds across most time periods.
- RI investments are split between two categories:
1. Broad (where ESG considerations are integrated in to the investment decision – $679.3 billion) or
2. Core strategy (screening, sustainability themed or impact investments – $186.7 billion).
- Broad RI strategies have seen a 22 percent growth since 2016 with Core RI increasing 188 percent over the past 12 months.
© 2020 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. Liability limited by a scheme approved under Professional Standards Legislation.
KPMG International Cooperative (“KPMG International”) is a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.
