The Responsible Investment Association Australasia (RIAA) has announced 61 “responsible investment leaders” for the year in Australia, marking an 11 per cent rise on the prior year as it identifies “ongoing momentum” in responsible investing.
It also identified 29 “responsible investors”, which has seen a rise of 26 per cent from 2023.
The recognition is based on RIAA’s Responsible Investment Scorecard, which evaluates asset managers on their commitment to responsible investing, including the integration of environmental, social and governance (ESG) factors into decision making, strong stewardship, and transparency in reporting societal and environmental outcomes.
According to the RIAA, responsible investment leaders represent the top 20 per cent of investment managers assessed while responsible investors are those who score at least 15 out of 20.
Among the 61 firms recognised as responsible investment leaders of 2024 were PIMCO, Nanuk Asset Management, Betashares, Ausbil, First Sentier Investors, Nuveen, Magellan, Pendal, T. Rowe Price, and Australian Ethical.
Meanwhile, responsible investors included Equity Trustees, Platypus Asset Management, Vanguard Investments, and Pengana Capital.
“It’s incredibly encouraging to see such strong progress, even after raising the standard last year,” said Estelle Parker, co-chief executive of RIAA, highlighting increased scrutiny of the sector and heightened regulatory action in the past year.
“The fact that more investment managers have met these higher expectations shows that organisations are embracing the challenge and lifting their game.
“There’s not only more of them doing it – they’re also getting better at it.”
The last year has seen a number of sustainability claims thrust in the spotlight, such as the Australian Securities and Investments Commission’s first greenwashing court victory in March which saw the Federal Court rule that Vanguard broke the law by making misleading claims about certain environmental, social and governance (ESG) exclusionary screens applied to investments in an index fund run by the firm.
The fund manager was later penalised $12.9 million.
Similarly, two super funds – Active Super and Mercer Super – have been found to have contravened the law regarding representations of their sustainability credentials.
Mercer Super was ordered to pay an $11.3 million penalty in early August by the Federal Court while Active Super is expected to appear in court at a later date.
RIAA’s Parker continued that the organisation continues to observe a “deeper commitment” to responsible investment practices.
“This isn’t about short-term adjustments; it’s about adopting a long-term, whole-of-business approach to building more sustainable and resilient markets,” she said.
