Responsible investment is boosting funds’ bottom lines with core responsible investment (RI) portfolios rising 13 per cent in the last financial year.
More than half of all funds under management in Australia have now signed to the United Nations-backed Principles for Responsible Investment, said Louise O’Halloran (pictured), executive director of the Responsible Investment Association of Australia.
Australian signatories to the principles increased 29 per cent from last year, with 112 Australian signatories now representing 14 per cent of the world’s signatories, with FUM now reaching US$591 billion.
The researcher of the RIAA’s 10th annual benchmark report, Michael Walsh, of Corporate Monitor, said core RI (which included specifically tailored managed funds, direct share portfolios managed by financial advisers, and microfinance/credit from community finance organisations) rose 13 per cent from $16.15 billion (re-stated) to $18.19 billion.
Within that core segment, managed RI portfolios alone rose 10 per cent from $14.02 billion to $15.41 billion, an increase of $1.39 billion.
Despite these increases, the concern for RI principles had not filtered through to Australian shareholders, said Michael Walsh. In the financial year 2009-10, “there were again no specific shareholder resolutions that related to environmental or social issues,” he said.
This was the fourth consecutive year in which this had occurred, and it contrasted with “further growth in shareholder activism in the US”.
Even in the US, shareholder resolutions dropped from 368 in 2009 to 360 in 2010, but the ‘for’ vote for such resolutions rose from 14.1 per cent in 2008 to 19.6 per cent in 2010.