The Responsible Investment Association Australasia (RIAA) now has boots on the ground in NZ with the industry group’s head of operations relocating from across the Tasman.
Matthew Mimms, RIAA board NZ representative, said while Josh Edmunds – RIAA operations and member services manager – was moving to NZ partly for personal reasons, his presence here coincided with rising interest in the sector.
“Josh will continue his RIAA role here but it’s good having someone on the ground in NZ,” Mimms said. “We’re seeing constant growth in [NZ] RIAA members.”
The RIAA currently lists about 15 NZ corporate members including seven fund managers: AMP Capital; ANZ Investments; Booster; Kiwi Wealth; Mercer; Milford; and, Pathfinder.
As well, the NZ Superannuation Fund (NZS), a handful of community trusts and consultancy firm, Eriksen and Associates are RIAA members.
NZ was one of the fastest-growing responsible investment (RI) markets globally, according to the 2017 RIAA annual survey of the sector – reporting yearly growth in 2016 of more than 2,500 per cent in funds managed to ‘core’ environmental, social and governance (ESG) investment principles.
The NZ responsible investment spike was principally due to a raft of KiwiSaver schemes screening out certain controversial companies in the wake of a media outcry.
However, Mimms said the ESG groundswell was continuing in NZ, which the 2018 RIAA NZ report, due for publication in July, would throw more light on.
The RIAA NZ conference is slated for September 18 at Auckland’s Hilton Hotel.
Last week the cutting-edge of RI – impact investing – also got a boost in NZ with the formation of a National Advisory Board to local investor discussion group, the Impact Investing Network (IIN).
The IIN advisory board intends to join the Global Steering Group on Impact Investment later this year, the group said in a statement.
In addition to observer member, Anne-Maree O’Connor, NZS head of responsible investment, the IIN advisory board includes: Louise Aitken, Ākina Foundation chief; Alex Hannant, director of social enterprise firm, Pocketknife, (and former Ākina chief); Raewyn Jones, WEL Energy Trust manager; John McCarthy, Tindall Foundation manager; Jamie Newth, head of Soul Capital; RIAA chief, Simon O’Connor; and David Woods.
Woods said in a statement: “New Zealand is ready for Impact Investing. It’s a frequent request, more and more people are asking for impact and the opportunity to invest in social or environmental outcomes.”
This February the Ākina Foundation closed out the initial round of fund-raising for NZ’s first impact investing fund at about $8 million – just shy of its intended $10 million lower-end target.
Last Friday new research from Morningstar found NZ listed companies were middling performers compared to global peers.
The Morningstar Global Sustainability Atlas, which maps out ESG scores for listed firms in 46 countries, says NZ “lacked consistency in its scores, with both strong and weak points around the range of sustainability factors”.
NZ rates well for ‘controversy’ – or lack of it – but poorly for environmental and “particularly weak” for social factors.
“The [NZ] score for Governance sat in the middle of the pack, meaning there is room for improvement around issues such as corruption, board independence and business ethics,” the Morningstar report says.
The NZX is looking to step-up ESG reporting and compliance for listed firms under a guidance paper released last year.
In further RI news last week, global investment giants JP Morgan and BlackRock released a novel ESG index series aimed at the emerging markets fixed income sector.
According to a release, the joint venture emerging market bond index suite would cater to the “growing demand from bond investors looking for a benchmark that targets emerging market (EM) issuers with strong ESG practices”.
“The new index is independently managed by J.P. Morgan and will cater to investors looking to gradually incorporate ESG and responsible investing in their overall fixed income investment strategies by anchoring its methodology around the bank’s widely used flagship indices such as the EMBI, GBI-EM and the CEMBI,” the statement says.
The JP Morgan ESG indices (JESG) score securities from over 170 countries and more than 650 bond issuers based on date from Sustainalytics, RepRisk, and Climate Bonds Initiative.
Additionally, the JESG index applies “ethical screening” for exposure to thermal coal, tobacco, weapons and “any violator of the United Nations Global Compact (UNGC) principles”.
The indices are published daily and rebalanced every month.