Responsible Investment News

Exclusions now the exception not the rule for NZ investors

Less than 10 per cent of those surveyed rated exclusions as among the most important strategies in RI portfolio construction, the RIIA report says.

“The findings show a shift in focus by survey respondents away from negative screening (44% in 2018) towards corporate engagement and shareholder action (40% in 2020),” the study says.

Despite the growing focus on ESG integration, however, the RIIA survey found exclusions remain a fundamental feature of the RI process.

“The frequency of negative screening has generally increased across all exclusionary themes, except genetic engineering,” the report says. “Screening for exposure to fossil fuel exploration, mining, extraction and production has almost doubled over the period (from 45% to 80% of all survey respondents who apply exclusionary screens).”

Overall, the study found a substantial increase in both the number of NZ investors included in the RI universe and the proportion of funds classed under the label in 2019 compared to the previous year.

Total assets under management identified as RI-like in NZ jumped from $188 billion in 2018 to almost $280 billion the following year. More than half (55 per cent) of the RI managers in NZ were “new in 2019”, the paper says.

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