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The Responsible Investment Benchmark Report Australia 2021 shows money is jumping ship to responsible and ethical investments. The Australian responsible investment market continued to soar in popularity to $1.2 trillion in 2020, with responsible investment assets growing at 15 times the rate that overall Australian professionally managed investments have grown.

This is the 20th annual Responsible Investment Benchmark Report prepared by the Responsible Investment Association Australasia (RIAA). The report details industry data on the size, growth, depth and performance of the Australian responsible investment market over 12 months to 31 December 2020 and compares these results with the broader Australian financial market.

Key findings:

  1. Responsible Investment AUM increased by $298 billion to $1,281 billion in 2020, while the AUM managed by the remainder of the market decreased by $234 billion to $1,918 billion.
  2. The proportion of Responsible Investment Leaders in the market remained at one-quarter of investment managers in 2020.
  3. Responsible Investment Leaders are more apt at managing ESG risks in financial decisions and at being prudent stewards targeting impactful engagements and voting over all relevant ESG resolutions.
  4. The top three responsible investment approaches (by AUM) are ESG integration; negative screening; and corporate engagement and shareholder action.
  5. In 2020, 57% of investment managers have at least 85% of their AUM covered by an explicit and systematic approach to ESG integration, compared to just 41% in 2019.
  6. Investment managers are improving accountabilities by better evidencing their claims.
  7. Exclusion of the fossil fuel sector is front of mind for both the public and responsible investment managers. But negative screening approaches and the expectations of investors do not always align.
  8. For the 28 survey respondents that offer sustainability-themed investments, climate change was the most prominent sustainability theme, followed by natural capital, similar to 2019. Investment in health and medical was third in 2020, likely elevated by the COVID-19 pandemic.
  9. Responsible investments continue to make financial sense, despite the widespread impact of COVID-19 on economies worldwide.



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