by Susan Edmunds
The Responsible Investment Association of Australasia’s latest annual report has been released, which shows $78.7 billion invested responsibly in New Zealand.
Total New Zealand assets managed under responsible investment strategies has grown by 28% in the last year.
The investment is happening though everything from the country’s largest institutions to boutique funds and KiwiSaver providers.
“This isn’t just a passing trend, but an evolution of the entire sector that is now being driven strongly by the acknowledgement that investments perform better when they are investing in more sustainable companies and assets,” said Simon O’Connor, RIAA chief executive.
He said it was a global trend and the RIAA now expected to see good inflows to responsibly-invested products, growth of new products and good returns.
“Years of demonstrated long-term investment benefits to investors, who consider environmental, social and governance (ESG) factors, have quietly shifted a significant portion of the investment industry to invest responsibly. Now, the early signs are that consumer demand is taking off with implications for all parts of the finance sector across advisers, banks, KiwiSaver providers and beyond,” he said.
KiwiSaver providers who offered responsible investment were doing well from it, he said. Providers such as Grosvenor, Quay St and SuperLife had recorded strong inflows over the past year.
He said the industry was reaching a tipping point. Responsibly investment funds had returned greater benefits than their mainstream peers over the last one, three, five and 10 years.
“This strong performance highlights the opportunities to invest ethically and responsibly. You can invest with confidence, aligning your money with your morals, and it’s not just a ‘well-intentioned’ philanthropic approach, it is generating great returns for savvy investors,” he said.
But he said advisers could be lagging their clients when it came to adopting the approach.
The RIAA has just three registered financial adviser members in this country.
O’Connor said it was also in discussions with dealer groups, banks and adviser networks with the view to adding them as members. “Surveys internationally show consumer sentiment is almost ahead of advisers because consumers are looking for options but advisers are still slow on the take-up. There is a lot of work to do with the adviser space.”
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