Investment managers not complying with ethical disclosures 15:50, Thursday, 5 August 2004
Sydney - Thursday - August 5: (RWE) - Australia's top investment managers are not complying with new ethical disclosure rules, according to a report released by the Australian Conservation Foundation today. Investment managers are not uniformly complying with ethical investment disclosure obligations imposed by the Australian Securities and Investment Commission. ACF corporate responsibility campaigner Charles Berger said investment managers were putting long-term investment returns at risk by not adequately integrating consideration of environmental and social issues in investment decision-making. The Corporations Act and ASIC guidelines require companies offering investment products to disclose the extent to which labour standards or environmental, social or ethical considerations were taken into account in the selection, retention or realisation of an investment. "A comprehensive review of publicly available product disclosure statements shows that although many fund managers claim to take the environment and other ethical considerations into account, more often than not they fail to give any details on how this is done," Mr Berger said. "The guidelines are clear: if you claim to take ethical considerations into account, you have to tell investors what your criteria and methodology are. "Except for the specialist SRI funds, most product issuers just aren't doing that," Mr Berger said. The report also concluded that some mainstream investment managers are taking a narrow, reactive view of how sustainability issues affect investment returns. "Some funds seem to take the position that they'll look at environmental or social issues if they present a 'risk', but they don't appreciate the strategic upside of positive performance. Such funds will miss out on the investment opportunities of more visionary companies that obtain a long-term competitive advantage arising out of innovation and sustainability."
