Socially Responsible Investment

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Socially Responsible Investment (SRI) takes into consideration not only the financial returns of a company but the social impact it makes. This can involve various levels of social responsibility from sustainability themed investing, negative screening (avoiding certain types of companies, for example, alcohol, gaming and tobacco) to best practice in relation to environmental, social and governance factors. It is becoming evident that responsible and ethical investing is receiving more mainstream attention in Australia, and that people want to align their investments with companies that share their values.

The Responsible Investment Association Australasia (RIAA) ‘Responsible Investment Benchmark Report 2015 Australia’ finds that “the myth of under performance of responsible investments is unfounded.” The RIAA’s goal is to see more capital being invested into sustainable assets that underpin strong investment returns and a healthier economy, society and environment.

Already by the end of 2014 the assets under management for responsible investment in Australia has risen to $629.5 billion. These investments have started from a low base, and are continuing to grow. Most large fund managers now include at least one SRI style fund in their investment suite. Socially responsible investors recognise that there is more to investment outcomes than what can be found in the financial reports.

Total-responsible-investment-in-Australia

As part of our investment approach we specifically exclude investments that earn the majority of their earnings from the gambling, tobacco or armament industries. When we select managed investments we do not automatically allocate any prescribed allocation to socially responsible funds. However, we do consider these funds and review them on their investment merits and frequently include some socially responsible investment funds in our client portfolios.

If you would like to learn more about SRI investing, please contact us to discuss further. We can assist with developing a strategy tailored to you and your investment values.

 

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About the Author:

Mario Isaias
Mario has specialised in corporate superannuation and financial advice for the past 25 years, after beginning his career as a Chartered Accountant. He provides advice to companies with corporate super funds and his advice spans other employee benefits including group insurances and employee wealth plans. Mario holds a Bachelor of Economics from the University of Sydney, a Diploma in Superannuation Management from Macquarie University, is a Fellow of FINSIA and is a Financial Planning Specialist with the Institute of Chartered Accountants of Australia and New Zealand. He provides advice to trustees and companies of large corporate super funds (including defined benefit funds). His advice also covers other employee benefits including group insurances and employee share plans. Mario has spoken at numerous industry seminars over the past 25 years with the Association of Superannuation Funds of Australia and the Institute of Chartered Accountants. Mario holds a Bachelor of Economics from the University of Sydney, a Diploma in Superannuation Management from Macquarie University, is a Fellow of the Financial Services Institute of Australasia and is a financial planning specialist with the Institute of Chartered Accountants of Australia.