Strong growth in broad responsible investment – RIAA

There has been “strong growth in broad responsible investment and community finance” over the past 12 months, according to a new study by the Responsible Investment Association Australasia (RIAA).

‘Responsible Investment 2008’, the eight annual benchmark report commissioned by the RIAA, found broad responsible investment grew 8 per cent from $52.8 billion to $57.1 billion to June 30 this year.

This reflects an increase in the assets of fund managers and superannuation funds that have integrated environmental, social and governance (ESG) issues into their investment processes.

Community finance, represented by the assets of 12 community finance providers in Australia, grew by 27 per cent over the year to $863 million.

Community finance includes micro-finance loan schemes and organisations dedicated to providing financial services to disadvantaged communities and not-for-profit organisations.

RIAA executive director Louise O’Halloran said it was a “difficult year for the investment markets and no less difficult for responsible investors, but responsible investment had held its own”.

“Performance in the mid to long-term is healthy, well outperforming mainstream funds, (and) for many in the finance sector, the move to responsible investment has become a practical matter.”

The study found the average responsible investor is getting better returns (than mainstream investors) for periods of three to five years in Australian share funds, overseas share funds and balanced growth funds.