SOCIALLY responsible investment is experiencing phenomenal growth in Australia.
SOCIALLY responsible investment is experiencing phenomenal growth in Australia. A benchmarking survey undertaken for the Ethical Investment Association in September 2001 highlighted that assets of SRI-managed funds grew by 86 per cent between 2000 and 2001 – 12 times faster than assets of managed funds as a whole.
Since 1996, SRI managed fund assets in this country have achieved a staggering growth rate of more than 500 per cent. This growth is reflected in the United States, Canada, United Kingdom and Europe.
The UK growth is largely responsible due to the introduction of changes to the UK Pension Fund Act, whereby pension funds must incorporate SRI investment principles into their investment process. The UK now has $540 billion invested in SRI funds as a result of these changes.
In Australia, new ethical disclosure requirements in the Financial Services Reform Act (FSRA) became effective on March 11 2002.
This Act requires that the seller or issuer of investment products must disclose to investors “the extent to which labour standards or environ-mental, social or ethical considerations are taken into account in the selection, retention and realisation of the investments”. It is envisaged that this new Act will continue to drive investment into this sector, as it did in the UK.
Since 1990 the Social Domini index (a US index of SRI companies)
has outperformed the S&P index
(top 500 US companies) by 2 per
cent per annum, which is an indication that investing ethically does not mean sacrificing performance.
A survey of Australian managed funds to June 30 2001 undertaken by the Australian Financial Review and Assirt found the best managed fund in Australia for the quality of performance over the past five years (with an average annual performance of 27.3 per cent) was an ethical managed fund.
In calendar year 2001 this managed fund achieved a return after all fees of 26.4 per cent, a tremendous perform-ance for a year that will not be remembered for its stock market performance. The fund manager also donates a proportion of its management fees to charity. Once again a win-win for all. This example of corporate social responsibility is an example to all businesses.
The Government’s Mandatory Renewable Energy Target (MRET), which commenced on April 1 2001, requires that Australia generate 2 per cent of its energy from renewable sources.
The States have set their targets much higher, with NSW and Victoria aiming for between 4 per cent and 6 per cent. Denmark, Germany and Spain are expected to draw more than 10 per cent of their electricity needs from wind energy by 2010. This legislation is also driving investment towards this rapidly growing sector, and a joint venture will hopefully be building wind turbines in the port of Fremantle soon.
Since 1996, SRI managed fund assets in this country have achieved a staggering growth rate of more than 500 per cent. This growth is reflected in the United States, Canada, United Kingdom and Europe.
The UK growth is largely responsible due to the introduction of changes to the UK Pension Fund Act, whereby pension funds must incorporate SRI investment principles into their investment process. The UK now has $540 billion invested in SRI funds as a result of these changes.
In Australia, new ethical disclosure requirements in the Financial Services Reform Act (FSRA) became effective on March 11 2002.
This Act requires that the seller or issuer of investment products must disclose to investors “the extent to which labour standards or environ-mental, social or ethical considerations are taken into account in the selection, retention and realisation of the investments”. It is envisaged that this new Act will continue to drive investment into this sector, as it did in the UK.
Since 1990 the Social Domini index (a US index of SRI companies)
has outperformed the S&P index
(top 500 US companies) by 2 per
cent per annum, which is an indication that investing ethically does not mean sacrificing performance.
A survey of Australian managed funds to June 30 2001 undertaken by the Australian Financial Review and Assirt found the best managed fund in Australia for the quality of performance over the past five years (with an average annual performance of 27.3 per cent) was an ethical managed fund.
In calendar year 2001 this managed fund achieved a return after all fees of 26.4 per cent, a tremendous perform-ance for a year that will not be remembered for its stock market performance. The fund manager also donates a proportion of its management fees to charity. Once again a win-win for all. This example of corporate social responsibility is an example to all businesses.
The Government’s Mandatory Renewable Energy Target (MRET), which commenced on April 1 2001, requires that Australia generate 2 per cent of its energy from renewable sources.
The States have set their targets much higher, with NSW and Victoria aiming for between 4 per cent and 6 per cent. Denmark, Germany and Spain are expected to draw more than 10 per cent of their electricity needs from wind energy by 2010. This legislation is also driving investment towards this rapidly growing sector, and a joint venture will hopefully be building wind turbines in the port of Fremantle soon.
