This article originally featured on Good Returns and was written by Matthew Martin.
Twenty-one Kiwi investment managers have made this year's Responsible Investment Association Australasia list of Responsible Investment Leaders.
The list (see below) includes some of the largest investment managers in New Zealand to some of the smaller boutique managers, and span across a wide range of asset classes, from equities to property and infrastructure.
According to a new report released today by the Responsible Investment Association Australasia (RIAA) - Responsible Investment Benchmark Report Aotearoa New Zealand 2021 - 43% of investment managers (20 out of 47) were assessed as Responsible Investment Leaders, scoring at least 75% on the RIAA’s Responsible Investment Scorecard, up from 24% in 2019.
Responsible Investment Leaders collectively manage $142 billion of the total investment market in New Zealand.
Sixteen Responsible Investment Leaders are based in New Zealand, while four are international investment managers with a significant presence in New Zealand.
Kiwi Wealth's quantitative and responsible investment strategist Steffan Berridge says the company is excited to be named as one of 21 RI Leaders by the RIAA again in 2021.
"At Kiwi Wealth, we are seeing increased interest in responsible investment as savings grow and investors become more engaged with their investments.
"Investors by and large want their money responsibly invested, but are often not clear on what they should expect," says Berridge.
Mindful Money co-founder and chief executive Barry Coates says the responsible investing wave is continuing to build in New Zealand, but "...behind the headline figures in the report are some interesting insights into challenges facing RI".
"The measure that funds were weakest on is arguably the most important – where the investment goes," says Coates.
"There is still relatively little funding going into the companies that can show a more positive real-world impact and there are still too many funds that claim to be investing responsibly but are failing to show evidence that they are actually doing so."
Coates says credibility on RI needs more fund managers to shift from a “tell me” marketing approach to the “show me” evidence-based approach.
Berridge says Kiwi Wealth believes RI should be core to the investment process with two aims, the first being better returns.
"Sustainable companies tend to perform better and present lower risk, meaning portfolios with greater tilt to sustainable companies are likely to have an edge."
The second aim being the drive for sustainability outcomes.
"Our role as investment managers gives us influence with companies that can and should be used to drive improved sustainability," Berridge says.
According to the report, Responsible Investment Leaders demonstrate leading practice by making their ESG investment policies available and sufficiently detailed, integrating ESG factors in valuation and asset allocation, clearly defining approaches to stewardship, demonstrating active ownership, applying screens to reduce downside risk and tilt towards solutions, and disclosing these aspects of their investment approach meaningfully.
New Zealand's RIAA Responsible Investment leaders:
- Accident Compensation Corporation
- AMP Capital Investors (NZ) Limited
- Bay of Plenty Community Trust (BayTrust)
- Booster Financial Services
- Devon Funds
- Harbour Asset Management
- Kiwi Wealth
- MFS Investment Management
- Mint Asset Management
- New Forests
- New Zealand Superannuation Fund
- Northern Trust Asset Management
- Nuveen, a TIAA Company
- Pathfinder Asset Management
- PIMCO Pty Ltd NZ
- Russell Investments NZ
- Salt Funds Management
- Simplicity NZ
- Southern Pastures