[GRTV] RI practice now ingrained but greenwashing a major concern says RIAA

Dean Hegarty, co-CEO of Responsible Investment Association of Australasia joins GRTV’s Philip Macalister to discuss RI performance, greenwashing concerns and the growth of impact investing, as the organisation releases its annual benchmark report.

Monday, December 16th 2024, 11:57AM

by Kim Savage

Use of responsible investment approaches are now considered baseline good practice among fund managers although greenwashing fears are growing, according to the Responsible Investment Association of Australasia.

RIAA’s co-ceo Dean Hegarty told GRTV the organisation’s latest benchmark report shows 56% of funds under management are now subject to an RI approach.

“It's really underpinned by those baseline ESG integration and stewardship and negative screening being used right across the portfolios of most of the investment managers who are operating in the market, as baseline good investment practice,” he says.

Greenwashing concerns are top of mind for fund managers, Hegarty told GRTV, having grown significantly in the past 12 months, amid examples of punitive action in other countries.

“It is important that when it comes to making claims about what a product is and isn't doing that those are being given the scrutiny by the legal team, rather than the marketing team, which is where it might have been a few years ago, and that shift is a really important one.

“What we don't want is for that concern about greenwashing to come from a lack of clarity about what we can and cannot say.”

Industry standards are not enough and regulators have a role to play in better supporting the sector, says Hegarty.

“What would be great to see is the regulator coming out and being clear that this is an expectation that they have, that when we're using this kind of terminology, this is what it means.

“Because at the moment, it's left to the organisations to make those decisions for themselves.”

RIAA’s report also examines performance data for RIAA-certified funds, and Dean Hegarty says the numbers once again prove RI does not mean a sacrifice in returns.

“What we're seeing across the board, and this is really research that matches a lot of global research and has been pretty consistent for us.

“Medium to long term, at worst, you are matching, and can expect to match, the performance outcomes of the market, if not outperform on the assumption you do it well.”

Watch this latest episode of GRTV with RIAA co-ceo Dean Hegarty to find out more about what’s happening in the world of responsible investment.