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Introducing RIAA’s Impact Investment Forum

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RIAA is excited to be announcing the launch of an Impact Investment Forum (media release here), a new initiative targeted squarely on the objective of bringing impact investment to scale in our region.

 

As those of you who have been involved or watching impact investing will know, there is a lot of activity, groups involved, forums, and of course investments going on, so you’d be forgiven for wondering why the heck RIAA needs to jump on the theme as well. Well, let me explain.

 

Representation and scale: RIAA’s growing membership based now includes 170 investment organisations from superannuation funds through to financial advisers, from institutional to retail, who in combination manage well over $1 trillion in assets.  There are now very few amongst our 170 members who are not either active in impact, are scoping impact, are assessing their own impact, or have at least some level of interest in impact investment.

 

Impact investing has moved rapidly over the recent few years from being an asset allocation option for family offices and other private wealth clients, to now being an active consideration for the investment portfolios of some of Australia’s largest superannuation funds.

 

RIAA is keen to develop the impact investment discussion with institutional investors, learning from those pioneers who have been investing in impact for years, in order to scale up impact strategies.

 

Collaboration: But just because investors want to invest in impact isn’t simply enough go grow an impact investing market. In acknowledgement of that, RIAA has purposefully set up this Forum in a collaborative model, bringing to the Forum table for-purpose businesses, philanthropy and private wealth communities, not for profits as well as reaching out to other key sectors including government.

 

It’s for this reason that the Forum has been established with partnerships in place to allow us to work together with key representative bodies across the impact investment ecosystem – Philanthropy Australia, B Lab Australia & NZ, Impact Investing Australia, Shared Value Project, and the Impact Investment Summit Asia Pacific. And we’re open to others too! Having worked closely to support the work of Impact Investing Australia for the past three years, we are now pleased to take on some of the key research pieces and work program that they have incubated to continue to build on that momentum.

 

Our intention is to engage and convene this diverse community and have the conversations, sometimes challenging ones, needed to unlock greater capital for impact.

 

Impact as responsible investment: Impact investment doesn’t and shouldn’t stand on its own. It is one of many responsible investment strategies that can work with and complement other strategies across a portfolio – ethical screening, themed investments, ESG integration and corporate engagement. In fact, we can’t make finance useful and underpin strong financial returns without seeing impact as part of a portfolio wide responsible investment strategy. So it is this portfolio wide view that we’ll bring to the impact investing conversation.

 

Impact versus outcomes: From this portfolio wide perspective, we see a great deal of opportunity to follow the lead of impact investors in using measurement tools and impact metrics to take a closer look at the impacts across the whole portfolio, such as from the perspective of a superannuation fund.

 

As superannuation heads towards a multi trillion dollar pool of capital, there is an acknowledgement that the way that super fund capital is being deployed will increasingly shape the world in which Australians are going to retire into – ie have an impact. At the same time, Australians are starting to engage en masse with funds on how their retirement savings are being invested on issues that they feel strongly about.

 

From these two perspectives, we expect many more funds will start reporting on their “impact” to their members, which will become a brilliant tool for deepening the engagement of their members – very useful in an increasingly competitive market.

 

We are keen to progress the conversations about building dedicated impact products and strategies, as well as the broader concept of ‘impact’ of a portfolio.

 

Credibility and quality: But before we all start saying we’re all impact investors, there needs to be clear focus on what constitutes a comprehensive and quality approach to impact investing. Consistent with our work across many responsible investment styles, RIAA is increasingly stepping in to help define leading approaches to responsible investing, and we believe we can bring that same lens to impact. Intentional impact, bringing additionality to investments, and using quality frameworks and metrics, including for example the Sustainable Development Goals, are just some of the focus we’ll bring to this Forum.

 

As demand for impact grows, and the market responds with new products, a focus on quality and credibility will be key. RIAA has a track record in bringing this focus to responsible investing, for example, through our Certification Program that has certified over 120 investment products as verifiable, quality and transparent offerings (check out www.ResponsibleReturns.com.au ).

 

Mission alignment: The introduction of this Forum is entirely consistent with the work and mission of RIAA. With our focus being on shifting more capital into sustainable assets and enterprises, we see impact investing as a great means of delivering on this mission.  Because after all, it’s the impact – across social, environmental and of course financial – that matters most.

 

Read more about the Forum here

 

Get in touch and join us in taking impact investment forward– here

 

Simon O’Connor

CEO RIAA.

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