The Responsible Investment Association of Australasia has launched a new website, responsiblereturns.com.au, to make it easier for investors to find ethical funds and financial products.
The site has been set up to allow consumers and investors to compare responsible and ethical superannuation, banking and investment products that best match their interests.
All financial products on the site have been certified in accordance with RIAA’s Responsible Investment Certification Program, which tests each product’s processes against its claims.
Organisations pay RIAA a certification fee but the Association receives no commission for the promotion of products that have been certified.
The RIAA has certified 150 financial products and most of them are listed on the new site. A relatively new and growing area is banking, where social impact considerations have been slower to emerge.
RIAA says it launched the site to meet growing demand from Australians for ethical financial products. “Nine out of 10 Australians expect their superannuation or other investments to be invested responsibly and ethically,” it says.
The Association released consumer research conducted by Lonergan Research, which shows that 65 per cent of Australians consider social issues when making a financial purchase. The most important issues are renewable energy, sustainable practices and positive social impacts.
Nine out of 10 Australians have concerns that would discourage them from, or make them reconsider, purchasing from a company. The main red flags are animal cruelty, human rights and labour rights violations, and involvement with pornography, tobacco and gambling.
One in five say they are already investing in ethical companies, managed funds or super funds. 53 per cent say they will consider it in the future.
The proportion of Australians who only consider maximising financial returns when they choose a superannuation fund has fallen from 46 per cent in 2013 to 31 per cent today.
RIAA chief executive Simon O’Connor says that almost half of Australia’s assets under management are invested responsibly. “And they are enjoying strong financial performance,” he says.
“Millenials are leading the charge, as the most likely group to investment in a responsible super fund that considers environmental, social and governance issues in addition to maximizing financial returns.”
O’Connor says the RIAA decided to set up responsiblereturns.com.au because people said access to information was “a persistent challenge”. Fifty-six per cent of respondents to the Lonergan research survey say there is not enough independent information available regarding switching to a responsible or ethical super fund.
Phil Vernon, the managing director of fund manager Australian Ethical, says there needs to be clearer definitions about what ethical investing is.
“There has been a proliferation of products in recent years and people find it difficult to find a product that best aligns with their interests. There needs to be clarity,” Vernon says.
“There are so many ‘shades of green’, which can confuse consumers on how their money is invested. The launch of the responsible returns web too, is an important step.”
O’Connor says there are plans to develop the site further, including listing financial planners.