All material on this FAQs page has been prepared by the Responsible Investment Association Australasia (ACN 641 046 666 AFSL No. 554110) for information purposes only. The FAQs on this page contain factual information only and is not intended to reflect any recommendations or financial advice, nor is it an offer or solicitation in relation to any particular financial product. For more information refer to our Financial Services Guide. 

 

 

Opting in to using RIAA Sustainability Classifications

• Confirmation of your classification
• Revision of your classification

 

 

How long would it normally take after opt in for my classification to be confirmed?

Once you opt in, capacity will be allocated to re-check your classification, and we will be able to provide a more specific timeline at that point.

 

 

How much does it cost? 

 

There is currently no additional cost for certified products to be classified and to use their classifications. 

 

To maintain a product’s classification, the product’s RIAA Certification must remain in good standing. This requires that the product provider meet their ongoing commitments as stated within our Trademark Licence Agreement. 

Content and methodology 

 

What does RIAA mean by the phrase “binding criteria” in its Sustainability Classifications methodology? 

 

The term “binding criteria” refers to criteria that are included in formal, publicly disclosed, legal documentation for a product, such as one or more of:

 

• Information Memorandum,
• Responsible Investment Charter (or equivalent)
• Statement of Investment Policy and Objectives
• Product Disclosure Statement
• Pitch Book
• Other (equivalent to the above)

 

The use of the phrase “binding criteria” does not prescribe a position on allowable exceptions to the stated criteria. The reliability of a product’s responsible investment claim is assessed against the Responsible Investment Standard during the product’s preceding certification assessment.

Certification and classification process

 

How will RIAA assess my product and classify it? 

 

Your product’s classification will be assessed against the criteria in our  Assessment Note – Sustainability Classifications.  

 

For currently certified funds, initial classifications were primarily based on the information provided during the most recent certification assessment, as well as material changes and updates that were provided within the application portal during the certification term. Final reviews of classifications prior to 1 May 2024 have taken the most current website disclosures for the product into account. 

 

For new certification applications, classifications are based on the answers provided in the product’s application, public disclosure, and verified answers to questions during the certification process.   

 

Classifications are contingent on successful certification or recertification, i.e., they are not available for financial products and services that have not achieved RIAA Certification. They are administered directly by RIAA, and in exceptional circumstances are subject to approvals by a Certification Assessment Panel. 

 

 

Will all certified products receive a classification? 

 

All RIAA certified investment products have received a current indication of their classification and from 1 May 2024, product providers  have the option to opt in to publish a version of the certification symbol with their classification.

 

 

When will I be able to use the classification and where? 

 

Once you have achieved a classification and opted into using it, RIAA will check and confirm your classification at the time of opt in, and provide you with a Certification Symbol that contains your product’s classification as well as detailed guidance within our marketing and style guide to support you in communicating your classification within your product documentation.  

 

In addition, your classification will be included on our Certified Products List that is shared each month with platforms such as BT Panorama, Hub24, Macquarie Wrap, Insignia Financial, AMP North and CFS. 

 

 

How do I dispute the outcome? 

 

Prior to launching the Sustainability Classifications Initiative, RIAA completed initial classifications of certified products in early December 2023 and shared the outcomes with the product issuers. An opportunity for reassessment was open until 9 February 2024. Between then and the launch of the initiative (1 May 2024), RIAA has reviewed each certified product’s classification and provided further information to product issuers where their classifications have changed.  

 

Re-assessment outcomes have now been finalised and future reclassification will occur at the product’s next recertification, unless the product undergoes a material change that leads to a review of certification in the interim.  

  

For all new product applications following the launch of the initiative, classifications are conducted by the RIAA team during the certification process. You will have an opportunity to engage with your analyst throughout the assessment. Once certified and classified, should you wish to appeal the outcome, please email RIAA’s Head of Certification, Shalini Samuel at  shalini@responsibleinvestment.org  to arrange a discussion.  

 

 

What can I do to shift my classification? 

 

Each of RIAA’s sustainability classifications corresponds to a product type and/or investment style that is uniquely placed to serve our market.  

 

If you are considering making changes to your product to achieve a different sustainability classification, the key to making this shift would be to pay close attention to our  detailed assessment criteria  to uncover some quick as well as longer-term wins.  

 

In brief, when determining the classification of a product, we consider: 

 

• Whether the product adopts a negative screening approach to responsible investment.
  
• Whether there are positively themed sustainability objectives, and whether they are prominently stated and/or binding. 

• Alignment of investment selection and ownership activities with the stated sustainability objectives. 

• Whether performance against stated objectives and targets is tracked and reported. 

 

For positively screened/tilted/themed products, quick wins could include clearer statement of your sustainability objective(s), better alignment of your stewardship activities with your sustainability objective(s), and disclosure of progress against your sustainability objective(s).  

 

In some cases, changing your product’s classification could be a longer-term endeavour that requires internal buy-in to adjust your investment selection and stewardship approach. 

 

As a member of RIAA, you have access to a suite of benefits that can support you on this journey. 

 

 

Will I automatically get reassessed at the point of recertification? 

 

Yes. Upon recertification your product will be re-classified during the recertification assessment.  

 

Should a mid-cycle review of your product’s certification be required due to material factors, such as changes to product features, independent verification panel findings, or outcomes of a product claims spot check, reclassification may occur at that time.  

 

 

Can I lose my classification? 

 

Once classified, your product classification will be tied to the product’s RIAA Certification. The classification will be lost if the product is no longer certified. 

 

 

Is it aligned with my certification dates? 

 

For all currently certified products, your classification will be valid from our launch date in early May 2024, to the expiry date of your Trademark License Agreement.  

  

For all certifications that occur from our launch date in early May 2024, classifications will be aligned with certification dates in accordance with your Trademark License Agreement.  

 

 

I am applying for certification now, will I get classified? 

 

A classification will accompany successful completion of RIAA Certification. 

Communications and promotion

 

How should the classifications be communicated to potential investors? 

 

Once you have achieved a classification and opted into using it, RIAA will check and confirm your classification at the time of opt-in and provide you with a Certification Symbol that contains your product’s classification as well as detailed guidance within our marketing and style guide to support you in communicating your classification within your product documentation.

 

In addition, your classification will be included on our Certified Products List that is shared each month with platforms such as BT Panorama, Hub24, Macquarie Wrap, Insignia Financial, AMP North and CFS.

 

 

How will RIAA promote this classification? What if I opt out? 

 

Once you have achieved a classification and opted into using it, RIAA will check and confirm your classification at the time of opt in, provide you with a Certification Symbol that contains your product’s classification as well as detailed guidance within our marketing and style guide to support you in communicating your classification within your product documentation.  

 

There will be an option of disclosing your classification on your product page on the Responsible Returns website. If you would like your classification disclosed, please let us know at the time that you opt into using your classification. 

 

In addition, your classification will be included on our Certified Products List that is shared each month with platforms such as BT Panorama, Hub24, Macquarie Wrap, Insignia Financial, AMP North and CFS. 

 

If you would like to opt out of using your classification at a later date, you can let us know by emailing  certification@responsibleinvestment.org. If your RIAA Certification is in good standing, this will have no impact on your ability to remain certified. We will re-send you the original Certification Symbol, as well as marketing and style guide as needed, update your product page on Responsible Returns, and remove your classification from our Certified Products List in the following month.  

Differentiation and benefits

 

How is this different to other classifications or labelling systems? 

 

A product label typically refers to a claim made on a product where the claim may or may not be regulated. A certification requires a product to meet certain standards set by the certifying body.

 

Unlike most global product labelling regimes, RIAA’s Sustainability Classifications are underpinned by a certification. A product cannot achieve a Sustainability Classification without first being RIAA certified. This means that before classification, products must have met the Responsible Investment Standard, associated criteria in accompanying Guidance Notes (listed under dropdown ‘Download Standards And Guidance Notes’), and been verified as true-to-label by RIAA.

 

As an overlay on RIAA Certification, RIAA’s Sustainability Classifications differentiate certified products by degree to which sustainability objectives are binding and addressed or targeted.

 

Our initiative relies heavily on international classifications and labelling systems in the EU, UK and US, but makes no representation that it meets the requirements of these other regimes. It is important to recognise that there is no one size that fits all and while our classifications accommodate, and interoperate with global regimes, they should not be seen as equivalent to them. RIAA’s Sustainability Classifications are designed to be fit for purpose for the Australia and Aotearoa New Zealand markets, delivering consistency for our members, the industry and investors, higher standards for ESG and Responsible Investment disclosure and a more transparent, accountable and resilient financial system.

 

For a snapshot of how we compare, there are the three classifications within RIAA’s sustainability classifications initiative: 

 

• Responsible  
• Sustainable  
• Sustainable Plus 

 

Responsible most closely aligns with European Commission: SFDR Article 8; UK FCA: No label; US SEC: ESG Integration

 

Sustainable most closely aligns with European Commission: SFDR Article 8; UK FCA: Sustainability Focus, Sustainability Improvers and Sustainability Mixed Goals; US SEC: ESG Focused

 

Sustainable Plus most closely aligns with European Commission: SFDR Article 8+ or 9; UK FCA: Sustainability Improvers, Sustainability Impact, and Sustainability Mixed Goals; US SEC: ESG Focused and ESG Impact

 

We are deeply engaged with the Australian government on product labelling and are actively shaping this work in a manner that we are confident will align closely with, and even build directly from our work. 

 

With this in mind, there is no better time to consider RIAA Certification and Classifications for your financial products. 

 

 

What will this new classification do to differentiate my product from others? 

 

RIAA’s sustainability classifications will differentiate certified funds based on their investment approaches, claims, processes, stewardship programs and disclosures. They will focus on the degree to which the funds consider ESG and sustainability factors, address environmental or social opportunities and risks, and target sustainability-related performance and/or outcomes.          

 

When investment criteria are binding and stewardship programs and progress publicly disclosed, a product issuer can be held to account for the sustainability claims it makes about its product. RIAA regards transparency as key to promoting stronger accountability, protecting consumers, and helping further professionalise the responsible investment industry.  

 

To achieve this differentiation, all certified products will be classified as: 

 

Responsible: Meets all the requirements of the RI Standard for its product category; or    

 

Sustainable: Sustainability objectives (environmental and/or social) are clearly stated. Investment selection and ownership activities align with stated sustainability objectives; or 

 

Sustainable Plus: Sustainability objectives (environmental and/or social) are clearly stated in legal documentation. Investment selection and ownership activities align with stated sustainability objectives. Performance against stated objectives and targets is tracked and reported. 

 

When an investor sees RIAA’s Certification Symbol and the classification, they know that firstly, the product or service has implemented an investment style and process that systematically takes into account environmental, social, governance or ethical considerations, and secondly, they will get a sense of the approach taken to accounting for ESG and sustainability factors in addition to the certification itself.  

 

How should I understand the differences between the various Responsible Investment approaches, a product with sustainable in the label, and sustainability classifications? And how does this affect my certified product? 

 

Responsible Investment approaches (e.g. negative screening, positive screening, ESG integration, stewardship, impact investing) are categories that enable understanding of how an investor invests responsibly. RIAA has developed a spectrum of Responsible Investment approaches that provide further visual detail about these different ways of investing.  

  

A sustainable label refers to any version of the term ‘sustainable’ within a product’s title/label. When an investor/ consumer sees the term ‘sustainable’ within a product label, it is reasonable to assume that the product will be associated with positive sustainability characteristics. Our Assessment Note for products trading with ‘sustainable’ in the label (released on 29 November 2023) seeks to define these expectations/ characteristics as criteria for RIAA Certification under the Responsible Investment Standard’s product labelling requirements.   

  

Since 1 February 2024, all newly certifying financial products with ‘sustainable’ in the label have been required to meet the criteria within this Assessment Note in order to achieve RIAA Certification. Barring potential future regulated product labelling requirements, existing certified products with ‘sustainable’ in the label have been offered a one-year legacy transition period from 1 February 2024 to meet the criteria within this Assessment Note.   

  

If your certified product is trading with a version of the term ‘sustainable’ in the product title/ label, please take a close look at the Assessment Note and start working toward meeting its criteria in order to maintain RIAA Certification. The assessment methodology provided in this assessment note is targeted at assessing the veracity of what product issuers are claiming about their product and its sustainability objectives.  

  

As of 1 May 2024, RIAA has launched this classifications system for all certified products to make it easier for investors to distinguish between and compare them. Issuers of certified products are able to opt into using your certified product(s) classification(s) should you wish to. The assessment methodology for sustainability classifications can be found in our Assessment Note – Sustainability Classifications. The assessment methodology for our sustainability classifications is targeted at assessing the degree to which sustainability is a consideration and binding investment criteria as part of their investment processes and stewardship programs.