What is Responsible Investment?
Responsible investment (RI) gives you a way to generate wealth over the long term using a prudent, sustainable investment strategy that reflects your personal values. We all want our superannuation and savings to be safe and earn a solid rate of return but there are other things we care about too.
You might feel passionate about the effects of climate change, the provision of affordable and accessible health care services, managing resources sustainably to meet our current needs and those of our aging and growing global population, and supporting the transition to a low carbon economy. RI gives you a way to make your beliefs and convictions an integral part of your financial decision-making.
Investing responsibly is also a way to support, and benefit from, solutions to life in the 21st century such as environmentally friendly technologies, sustainable agriculture, microfinance, medical technologies, recycling and waste management, and “green” infrastructure and transport projects.
You may have come across other terms such as ethical, green, sustainable or socially responsible investing. These are all different names used to describe what is now most commonly referred to as responsible investment.
Ask for our ‘Responsible Investment Profiling Questionnaire’ to determine your ethical investment criteria.
Download the Fact Sheets
If you’re motivated to make a difference to the world you live in, responsible investment offers a tangible way to translate these words into actions. Click to Download the Fact Sheet.
Values and ethics are back in the limelight and smart investors are demanding greater accountability from the companies in which they invest. Click to Download the Fact Sheet.
Responsible investment (RI) is an excellent way to make a positive contribution if you are passionate about the environment and climate change. Click to Download the Fact Sheet.
Once upon a time RI was considered a niche market. Today responsible investors come from all walks of life and the issues that motivate them are universal. Click to Download the Fact Sheet.
Responsible Investment Performance
The latest benchmark report prepared by the Responsible Investment Association Australasia details the following performance of RI in Australia:
- To the end of June 2011 the average responsible investor in Australia made better returns than mainstream investors for almost all time periods from one to seven years across three major investment categories, Australian shares, International shares and Balanced.
- In the largest category, Australian shares, the major RI funds enjoyed a stronger return than the overall fund average and the market benchmark. This cements a pattern of better returns for RI investors over all time periods.
- Overseas RI funds did even better. This category has suffered losses over the past three years but it is now showing vast relative outperformance over all time periods measured.
The following table shows seven year performance figures as at June 2011 from CAER*:
|FUND TYPE||AUSTRALIAN SHARE FUNDS||INTERNATIONAL SHARE FUNDS||BALANCED GROWTH FUNDS|
|Average RI Fund||8.38%||5.21%||7.00%|
|Average Mainstream fund||7.63%||-0.89%||4.58%|
* Responsible Investment Annual 2011 prepared by CAER for the Responsible Investment Association Australasia. This report uses Morningstar, Fund Manager data and is available at www.responsibleinvestment.org
So Why Become a Responsible Investor?
The most common reasons why people decide to become responsible investors are:
- To generate competitive returns whilst making a difference to the environment or society.
- To ensure your money is directed towards companies making a positive difference to the environment and the impact of climate change whilst avoiding those that cause harm.
- As a way to influence corporate behaviour and push for greater accountability on issues like employment and trade conditions, environmental sustainability and good corporate governance.
- To take your social or consumer activism to the next level.
Responsible Investment Options..
The range of responsible investments available in Australia and New Zealand is extensive and growing all the time. There are products or services for every life stage, time frame and risk profile.
Responsible investment is a way to generate competitive returns and find sustainable solutions to many of the challenges we face in the 21st century.
- Managed funds with a particular RI mandate are the most common way to become a responsible investor. The fund manager may screen in or out certain sectors or companies based on their environmental or social impact; incorporate an analysis of environmental, social and governance risks and opportunities with traditional financial data; select only those companies scoring the highest sustainability rating; or invest along thematic lines.
- Superannuation funds may offer one or more RI investment options or integrate RI principles into their mainstream investment process for all of their options.
- A specialist RI financial adviser can help you design a wealth management plan based on the principles of RI using either managed funds or direct shares.
- You can open a savings or loan accounts with a bank or credit union that follows responsible lending and business practices or take out a “green” home or car loan.
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Certified by RIAA
Responsible investment is a strategy used by investors in order to incorporate environmental, social, governance or ethical factors into their investment choices and ownership practices.
The Responsible Investment Certification Program is the first of its kind in the world and is owned and managed by the Responsible Investment Association Australasia (RIAA). The Program was created in 2005 in partnership with the NSW Department of Environment and Conservation and the Victorian Government.
The Responsible Investment Certification Program helps investors by providing standardised and consistent information about certified responsible investment products, services and policies.
To be licensed to use the Certification Symbol, James Baird was required to meet strict disclosure requirements for the category of Financial Adviser.
The Certification Symbol signifies that an investment product, service or policy takes environmental, social, governance or ethical considerations into account along with financial returns.
James and JustInvest Financial Planning’s processes were also independently reviewed. Key details regarding the Certification are available through RIAA’s website or by calling RIAA on (02) 9025 5711.
The Certification Symbol is a Registered Trade Mark owned and managed by RIAA. The Responsible Investment Certification Program does not constitute financial product advice.
See www.responsibleinvestment.org for more details.
RIAA Disclaimer and Disclosure
The Certification Symbol signifies that James Baird of Sentry Financial Services offers Responsible Investment products; has undertaken continuing professional development on responsible investment; and conducts inquiries regarding client concerns about environmental, social, governance or ethical issues. The Symbol also signifies that James Baird has adopted strict disclosure practices required under the Responsible Investment Certification Program for the category of Financial Adviser. The Certification Symbol is a Registered Trade Mark of the Responsible Investment Association Australasia (RIAA). Detailed information about RIAA, the Symbol and James Baird can be found at www.responsibleinvestment.org, together with details about other responsible investment products and services certified by RIAA.