Investors warm to SRI

Socially Responsible Investment (SRI) in Australia has taken off with funds under management jumping by 41 per cent to $21.5 billion over the 12 months ending June 30.

According to the latest SRI Benchmarking Survey, released today in Sydney, the sector grew by more than twice that of the Australian retail and wholesale investment market.

The survey was announced this afternoon at the 4th Annual Ethical Investment Association (EIA) Conference and claims assets invested in SRI have doubled since the first annual benchmarking study was released in 2001, and by a whopping 920 per cent since June 2000.

The $21.5 billion in assets include $3.3 billion in managed SRI funds and $168 million in private portfolios managed by financial advisers.

Religious bodies using SRI criteria have invested a total of $7.2 billion in the sector, and charitable trusts more than $327 million.

Employer superannuation funds using SRI overlays have invested $7.2 billion, and community finance entities $322 million.

In addition, shareholder resolutions on environmental and social issues are valued at $3 billion.

The EIA says the number of SRI managed funds have also increased substantially, up from 10 funds in 1996 to 46 in 2001 and 89 today.

Private portfolios managed by financial advisers jumped 32 per cent during the year, bringing the increase over the past three years to 113 per cent.

Meanwhile funds invested by charitable trusts using SRI criteria have grown by 48 per cent since the end of the 2002/03 financial year.

The survey also found a growing number of superannuation funds are offering members the opportunity to invest in a socially responsible manner.

Superannuation funds using an overlay approach have $7.2 billion in assets, up by 40 per cent on last year.

Community finance programs, which provides capital to people denied by conventional lending institutions increased by 69 per cent, bringing the growth over the past three years to 148 per cent.

The survey also reveals a marked increase in shareholder activism since 2001, notably in respect to resolutions covering environmental or social issues.

The major activity was spearheaded by the Wilderness Society, which succeeded in gaining support for an anti-wood chipping resolution from 25 per cent of shareholders at a Commonwealth Bank AGM in October 2003.

This represents the largest support for a shareholder resolution in Australia's corporate history, surpassing the previous record of 23 per cent, which was set by a Wilderness Society resolution in the previous year.