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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."
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