ESG Research Updates
/ESG Research Updates
ACCR report reveals members not putting their money where their mouth is on ESG
A new report by the Australian Centre for Corporate Responsibility (ACCR) found that eight members of the Investor Group on Climate Change (IGCC) supported fewer than half of climate-related proposals between 2017 and 2019. The super funds include AustralianSuper, Cbus, BT, Russell Investments, First State Super, UniSuper and AMP.
The IGCC is a collection of 74 institutional investors and other interested parties that are concerned about climate change impacts. To join the group, a statement of commitment must be signed, asking members to show progress in terms of incorporating risks and opportunities linked with climate change into investing choices and operations.
Members are not asked to disclose proxy voting records, with IGCC saying they don’t make recommendations to members regarding individual resolution votes or act as a proxy voting adviser. Investors make their own judgements regarding resolutions.
A good example, used by AustralianSuper, was that it did not support a BHP resolution because it was too narrow: BHP wanted to walk away from its industry associations, rather than put the onus on the other companies to use their influence to create Paris-aligned positions. Subsequent resolutions have allowed better outcomes for climate goals, which AustralianSuper supported.
New research predicts impact investing to boom
A new research project, The Benchmarking Impact 2020 Report, has predicted that the impact investing market in Australia will hit $100 billion by 2025.
The research found that investments that create a positive environmental or social return and financial gains are in greater demand than ever, experiencing exponential growth over the past two years. The market has tripled from $5.7 billion to $19.9 billion across this period, with Australian investors (including via superannuation investments) increasing exposure to clean energy, housing, education, health and conservation.
The report was created by the Responsible Investment Association Australasia (RIAA), and was a survey of 125 Australian investors with a collective $1722 billion in assets under management. Over 110 impact investment products were assessed. Most impact investment products are ‘green’ or ‘sustainable’ bonds ($17 billion) and $2.9 billion in real assets, private debt, public and private equity, social impact bonds and others.
Key findings include:
Ninety-three per cent of those surveyed said their impact expectations are being met or exceeded by their impact investments
Ninety-two said their financial expectations and impact investing expectations were being met
Over 75 per cent expect competitive or above market rates of return
Around 90 per cent of those surveyed believe impact investing is set to grow in significance
There is now $20 billion of capital in Australia delivering impact to build a better society and environment
