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Australia's responsible investments have outperformed the mainstream funds, as shown by an annual report into the country's ethical investment sector, and people making conscious decisions to switch funds are at a 10-year high.
The Responsible Investment Association Australasia’s (RIAA) 2014 Benchmark Report also found more generally that the responsible investment market is up 13 per cent, to $135 billion from last year.
“This report is great news for Australians investing with a focus for financial security, as responsible investments have outperformed average fund returns in all categories over the last five and ten years,” says Simon O'Connor, CEO of RIAA.
“Many Australians took a hit in their personal savings during the global financial crisis and are looking for future-proofed investing.”
For the first time, the annual report has noted that there has been a consumer-driven increase in responsible investing over the last decade, with a distinct shift away from investment in 'dirty' industries such as tobacco, coal and unethical textile manufacturing.
Claudia Walker, Manager of Operations at RIAA, told Green Lifestyle, “there has been a noticeable shift in the past 18 months as to the approach society is taking to how their money is invested, especially superannuation”.
“Beyond the numbers, there is so much more happening in this industry that reminds us of the true scope and influence that responsible investors have; the massive divestment from tobacco, showing a huge investor commitment to a healthier society; and the push from Australian investors to redevelop garment manufacturing standards following the horrific Rana Plaza building collapse in Bangladesh last year.
“All of this work is an investment in our country and our society; the more everyday people choose to invest their money in responsible, ethical, and sustainable options, the more opportunities we will have for positive change.”
Data from the report was gathered from a survey of more than 70 asset managers, super funds, financial advisers, banks and community investment managers across Australia and New Zealand, in addition to data from Morningstar, Mercer and RIAA’s own data and research.
“Between the long-term delivered value, out-performing mainstream funds and increased demand for responsible investments, this report is again putting to bed the myth that responsible investments are the underperforming and undervalued younger brother,” said O’Connor.
“The power of the Benchmark Report isn't just in the numbers, it shows us the opportunities we have to participate in the financial system in a much more meaningful way.”