Product Certification

The Responsible Investment Association Australasia’s (RIAA) Responsible Investment Certification Program is the leading initiative for distinguishing quality responsible, ethical and impact investment products and services in Australia and New Zealand.

 

RIAA’s Certification Symbol is recognised by investors and consumers across the region, providing confidence that a product or provider is delivering on its responsible investment promise and meeting the Australian and New Zealand Standard for responsible investing.

 

When an investor sees RIAA’s Certification Symbol, they know the product or service has implemented an investment style and process that systematically takes into account environmental, social, governance or ethical considerations, and this investment process reliability has been verified by an external party. It also meets the strict operational and disclosure practices of Certification Program requirements.

 

Our RI Certification Quick Guide provides a summary of the requirements that each product must satisfy prior to being awarded RI Certification.

Product Categories

Certification is available for RIAA members to apply within the following categories:

 

  • Product
  • Investment Management Service
  • Superfund Whole of Fund

 

Eligibility and Ongoing Requirements

Certified responsible investment products, investment management services and superfunds must:

 

1. Meet strict operational and disclosure requirements and make publicly available specific details of their services as laid out under the respective category of the Certification Standard

2. Invite their members, clients and peers to hold them to account for their behaviours consistent with the Program Code of Conduct

3. Be subjected to the Quality and Thresholds Test

4. Promote the Standard by incorporating the Certification Symbol into marketing and communications material in accordance with the Certification Symbol Licensee Agreement and the Licensee Marketing Kit and Style Guide

5. Agree to participate in good faith in the Program’s Concerns & Grievance Policy and Procedures with a view to protecting the reputation of responsible investment peers, individual investors and/or the responsible investment industry as a whole

6. Hold current membership with the Responsible Investment Association Australasia

7. Be operating/offered for investment in Australia and/or New Zealand

8. Be current and legally trading

9. Not be persistently subject to legal proceedings and/or regulator investigation

10. Commit to notify RIAA of material changes in product or service characteristics that may impact the suitability of the product remaining certified under the Program

Product Category Requirements

There are eight broad requirements for investment Products under the Certification Program:

 

1. Responsible investment strategies are formal, disclosed, consistent, auditable and fit for purpose

2. Product labels are clear, honest and not misleading

3. Product avoids significant harm – as a minimum requirement excludes tobacco and controversial weapons producers

4. Investment process accounts for environmental, social and governance factors

5. Product discloses full holdings (including holdings by fund of funds), performance, sustainability outcomes and engagement and voting practices

6. Product is managed by active stewards and managers can detail the stewardship practices, such as engagement and voting and the improved outcomes of these practices

7. Managing organisation has a formal commitment to responsible investment

8. Managing organisation provides educational information to members and customers about the responsible investment strategies and investment outcomes

 

For the full detail of the Certification Standard across all categories please click here.

Superfund (Whole-of-Fund) Category Requirements

A Superfund Whole of Fund (WOF) must meet the Product Certification requirements (above), plus:

 

1. Have in place a responsible investment charter or policy that governs the way responsible investment is considered and implemented across the entire superannuation fund

2. Apply at least two responsible investment strategies across the superfund (e.g. screening plus ESG integration), with at least 85% of total fund assets managed under clearly defined responsible investment strategies

3. Actively be involved in advocating for more responsible financial markets either directly through contributions to public and industry-based discourses and/or indirectly through membership and participation in collaborative initiatives.

 

For the full detail of the Certification Standard across all categories please click here.

Investment Management Service Category Requirements

Investment Management Services (IMS) must meet the Product Certification requirements (above), plus:

 

1. Be legal – hold a current Australian Financial Services Licence

2. Be experienced – their key and responsible investment personnel have at least two years’ relevant experience providing responsible investment advice and can demonstrate how they stay up to date on developments in responsible investing (such as by meeting the requirements of RIAA’s Continuing Education Credits system)

3. Have in place a published responsible investment charter or policy that governs the way responsible investment is considered and implemented across the entire portfolio

4. Promote responsible investment services – include responsible investments as part of the services systematically delivered to ALL clients, that should be able to be demonstrated by clear auditable process (e.g. such as questions in Fact Find, or online sign up).

 

For the full detail of the Certification Standard across all categories please click here.

Certification Process

The process for applying for certification is as follows:

 

1. Contact RIAA to ensure product or service certification eligibility

2. Submit application (Products through the online member portal)

3. RIAA Certification and Ratings team assesses application and makes recommendation to Certification Assessment Panel (a delegated sub-committee of the RIAA Board)

4. Certification Assessment Panel examines, deliberates and determines outcome of application

5. Data is independently verified by a member of RIAA’s Independent Verification Panel (IVP) (Products only)

6. Commit to updates and ongoing data requirements, as per the Program requirements, during the term of certification (generally two years but earlier recertification required if material changes).

7. Submit to RIAA’s annual spot audits (executed by RIAA or a member of IVP) (Products only).

 

This process may take up to 3 months from the date of application, so please ensure that sufficient time is allowed if this is required for a PDS.

Certification Pricing

RIAA is committed to delivering certification on a cost recovery basis, whereby our costs are covered by fees that enable RIAA to invest in the marketing of the Certification Symbol for wider acknowledgement.

 

As of 1 January 2021, the fees and levies for members with certified products (Products, Superfund Whole of Funds and Investment Management Services) are:

 

  • Annual product fee of $800 + GST per certified product
  • Annual levy of 25% + GST of the licensee’s RIAA membership
  • Independent Verification Panel (IVP) fee of AU$3,100 AUD + GST (and reasonable expenses for the service*) in the first year of certification, and thereafter if a major change to investment process occurs.

 

The annual product fee is charged when the member is deemed eligible to apply and RIAA begins the assessment. This fee, payable up front, will be invoiced pro rata for the period remaining on the applicant’s current RIAA membership, after which this fee will be itemised and included in the applicant’s annual membership renewal invoices.

 

The annual certification levy is charged pro rata for the period remaining on the applicant’s current RIAA membership at the point of successful certification. Thereafter, the levy will be itemised and included in the applicant’s annual membership renewal invoices.

 

Recertification is required every two years. Fees and levies for recertification are the same as those for new certification.

 

* New certified Products, Superfund Whole of Funds and Investment Management Services require a third-party verification of the self-declared data (member portal questionnaire). Applicants will be appointed a verifier from RIAA’s Independent Verification Panel.

 

For issuers wishing to have several products with differing responsible investment strategies applied, or banking style products which must also satisfy ‘responsible lending principles’, a separate (higher) IVP fee may need to be charged to fairly reflect the complexity and time taken to undertake the verification. This would be discussed ahead of certification and a price agreed between the parties.

Certification Data Obligations

Certification assessment is based on both publicly available information, as well as internal documentation of the responsible investment strategy and supporting processes. Information is required on an organisation level and product level. If the fund operates under a fund of fund or multi-asset structure, information will be required for all of the underlying funds, assets or investments.

 

Certification Assessment
The certification application form, available through the online member portal, forms the basis of the information used in the certification assessment. Access to this portal is only available to members who have applied for certification.

 

Data sources from which assessment for eligibility is taken include:

1. Data provided by the applicant through the RI Certification application form

2. Public documentation, such as on applicant’s corporate website, PDS or other relevant legal documentation

3. Investment team interviews

4. ESG research (internal and third-party)

5. Methodologies and tools to substantiate responsible investment strategies, sustainability claims and measurement e.g. carbon footprint relative to benchmark

 

A more detailed checklist of data requirements is included in your Certification Introductory Pack.

 

Who the information will be made available to?

Certification and recertification requires that information be made available to the Certification & Ratings team, Certification Assessment Panel and the Independent Verification Panel. The certification application form includes approximately 20 questions that are published, upon successful outcome of the certification assessment, on the publicly available Responsible Returns online tool. The application form includes requests for confidential information that is not distributed outside of the RIAA Certification & Ratings team, Certification Assessment Panel and the Independent Verification Panel.

 

Ongoing disclosure requirements
To comply with the Certification Standard, there are a number of ongoing disclosure requirements, on the product’s website/client portal or equivalent and Responsible Returns.

 

These disclosure requirements include:

1. Full portfolio holdings (for equities funds, or an equivalent disclosure for other products, including a full look through for fund of funds) with no longer than a 90-day lag, twice-annually

2. Past financial performance results/returns of the product twice-annually

3. Methodology and measurement of sustainability claims at least annually

4. Activities and outcomes from stewardship practices (both engagement and voting) – requirement as at 1 Jan 2021

Interested in becoming certified?

We have created a short online checklist to help you assess if you are ready to proceed.

Complete Pre-Certification Checklist

Contact RIAA for more information

Contact RIAA