From Values to Riches

Unsurprisingly, climate change is a top concern for Australians. Here is the latest of RIAA's research which shows that now "four out of five Australians (83%) expect their bank account and their super to be invested responsibly and ethicallyand 74% would consider moving to another provider if they found out their current fund was investing in companies engaged in activities that were inconsistent with their values."

From Values to Riches 2022: Charting consumer demand for responsible investing in Australia from the Responsible Investment Association Australia.

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CLIMATE CHANGE - is it real? Will it affect my investments?

In just two years, we have suffered through multiple record-breaking floods and a fire season never experienced before. Even at current levels, human actions in heating the climate are causing dangerous and widespread disruption, threatening devastation to swathes of the natural world and rendering many areas unliveable, according to this landmark report published last month.

Climate breakdown is accelerating rapidly. It is now predicted by the Intergovernmental Panel on Climate Change ((IPCC) that many of the impacts will be more severe than predicted and there is only a narrow chance left of avoiding its worst ravages. We are seeing the effect of climate change induced devastation on food prices.

Adding fuel to inflationary pressures has been a global pandemic where supply chains have been disrupted like never before, heightened geopolitical risks with the Russian invasion of Ukraine, putting price pressures on everything from crude oil to wheat to sunflower oil.

The Intergovernmental Panel on Climate Change (IPCC) is the United Nations body for assessing the science related to climate change.
The report is free to download

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Fossil fuel subsidies - why are they important?

Instead of making fossil fuels more expensive, many governments, inclusive Australia, do the opposite.

They subsidise them.

If we want to reduce greenhouse gas emissions we should not pay to burn fossil fuels.

Reprinted with permission of Our World In Data

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ETHICAL INVESTING and PERFORMANCE

The body of evidence continues to stack up – nationally and globally - showing that responsible investments typically achieve stronger risk- adjusted financial performance than their peers, consistently outperforming against benchmarks over short-term and long-term time frames. This is the latest comparative performance update of Responsible Investments from the Australasian independent industry body.

Reprinted with permission of RIAA - Responsible Investment Association Australasia

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Ethical Investing and Uncertainty

The first contribution is by John Elkington, who believes that key elements of the established economic order are under threat from the uncertainties created by climate change, pandemic and ecosystem breakdown.

Which begs the question "Is it too late?", as it appears we are headed into a "...hellish world of systemic breakdown", he declared in the opening pages of his latest book Green Swans.

Yet far from feeling negative, he suggests that this massive global disruption could be the start of an adventure, as we rethink the future. Elkington's view carry weight.

Reprinted with permission of Aviva Investors

This article originally appeared on Aviva Investors’ AIQ thought leadership site’
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The Economic Case for Nature

The connection between our economy and its reliance on our ecosystem seems obvious, but is often overlooked in our investment decisions.  The issue for investors has been that there was little data available on how to quantify the investment risk of a bio system decline. This changed recently with the release of this World Bank Report which clearly states that our economy is dependent on nature, and that the collapse of only three ecosystem services could result in a decline in global GDP of $2.7 trillion ANNUALLY by 2030. 

Source: World Bank Group

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Rio Tinto shows us why ESG cannot be ignored

Mining giant Rio Tinto has been at the receiving end of blistering public criticism this year. It has been accused of environmental and human rights violations in a complaint filed with the Australian government that says an abandoned mine is leaking waste and poisoning rivers on the island of Bougainville.

Source: Morningstar

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'Great place to invest': Top investor says climate change is the biggest opportunity since the internet

The head of $3.7 billion Melbourne fund manager Munro Partners has described climate change as the biggest investment opportunity since the advent of the internet.

Source: Sydney Morning Herald

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Responsible Investment Benchmark Report 2020 Australia

The responsible investment market continues to grow, with associated assets under management (AUM) up 17% over the course of 2019 to $1,149 billion. This represents 37% of total professionally managed assets under management (TAUM), which now sits at $3,135 billion according to the Australian Bureau of Statistics (ABS).1*

Source: RIAA - Responsible Investment Association Australasia 2020

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IMF warns investors: you’re not ready for climate change

Investors worldwide are underestimating the financial risks from climate change, and companies need to start disclosing their exposure, according to the International Monetary Fund.

Source: Bloomberg May 30 2020

As global temperatures rise, severe climate events may impact companies owning assets in areas hit by drought, floods, wildfires and storms, the fund said Friday in the latest chapter released from its Global Financial Stability Report. At present, asset prices fail to reflect the risk of extreme weather events that may cost $1 trillion annually starting in 2050, the IMF said. Continue reading here: