The world of sustainable investments is evolving rapidly. Something that began as a popular trend with institutional investors, has now developed into a diverse investment characteristic with numerous strategies and objectives that advisers can incorporate into their core service offering to differentiate and add value for clients.
This growing demand from investors is being met with improving and innovative supply from investment managers, who use a variety of methods to incorporate Environmental, Social and/or Governance (ESG) factors into their investment process.
This rapid growth around the globe is changing the expectations advisers and investors have of sustainable investment. At BT, we believe a sustainable investment approach is a key element of providing long-term value for investors, and the appropriate consideration of ESG factors in the investment process can help drive better financial outcomes and positively influence risk-adjusted returns.
But investors will have a view of what investing sustainably means to them and how important it is for their investments. Maybe they like to exclude certain stocks or industries across their portfolio. Or possibly they favour a strategic tilt to something like impact investing, where capital is used to provide solutions to some of the world’s most significant environmental and societal challenges. Perhaps they prefer a focus on how ESG factors affect investment performance and are interested in how an investment manager manages ESG risk, for example, or how they consider ESG factors in the investment process and engage with underlying companies on ESG risks.
BT Investment Solutions (BTIS)
BTIS delivers an institutional grade investment management capability across a range of solutions, from low-cost index portfolios to actively managed strategies.
So, how can you ensure your client’s investments align with their perception of sustainable investment?
To ensure an investment manager’s approach to sustainability and ESG complements your clients’ views, we suggest you ask yourself two questions.
Understand what the manager is trying to achieve and how they intend to use ESG information in their investment process. Does the process align with what your client is expecting, and would it fit into their portfolio?
We also recommend reading a product’s PDS and any sustainability reporting from investment managers to understand what a product does. Some investment managers provide regular reporting that may include examples of where their investment process has considered and successfully implemented sustainability practices.
The industry has stepped up to help advisers and investors better understand sustainable investments and identify those that are true to label.
The Responsible Investment Association Australia (RIAA) is Australia’s recognised industry body for Responsible Investing, advocating for responsible investing and a sustainable financial system. Together with its 450 members1 (of which BT has been a member since 2000), its goal is to “promote, advocate for, and support approaches to responsible investment that align capital with achieving a healthy and sustainable society, environment and economy”.
RIAA offers tools to help investors and advisers better understand and navigate responsible investment products, including the world’s first and longest-running fund certification program and a free certified product search that yields information about where a fund fits on the spectrum of responsible investment.
RIAA’s certification symbol distinguishes quality responsible, ethical and impact investment products. So, if a product has RIAA certification, you can be confident it’s delivering on its responsible investment promise and meeting a high standard of responsible investing.
There are eight broad requirements investment products need to achieve certification2.
BT offers sustainable investment options across all asset classes and investment styles. This allows investors to fully invest in sustainable investment options or add a strategic tilt into a portfolio instead, perhaps using a thematic, sustainability or impact investment.
As of February 2022, this is the list of RIAA certified products available on BT Panorama.
|Fund name||APIR code||Investment strategy||Fund manager|
|Aberdeen Std Focused Sustainable Australian Equity Fund||MGL0114AU||Australian shares||Aberdeen Standard Investments Australia Limited|
|Acadian Wholesale Australian Equity Fund||FSF0787AU||Australian shares||Acadian Asset Management|
|Acadian Wholesale Global Equity Fund||FSF0710AU||International shares||Acadian Asset Management|
|Affirmative Global Bond Fund - Class A||FSF7298AU||International fixed interest||Colonial First State Investments Ltd|
|Alphinity Sustainable Share Fund||HOW0121AU||Australian shares||Alphinity Investment Management Pty Ltd|
|Altius Sustainable Bond Fund||AUS0071AU||Australian fixed interest||Australian Unity Funds Management|
|AMP Capital Ethical Leaders International Share Fund||AMP0455AU||International shares||IPAC Asset Management Limited|
|AMP Capital Global Property Securities Fund||AMP0974AU||International property||AMP Capital Investors Limited|
|Ausbil Active Sustainable Equity Fund||AAP3940AU||Australian shares||Ausbil Investment Management Limited|
|Ausbil Investment Trust - Candriam Sustainable Global Equity Fund||AAP0001AU||International shares||Ausbil Investment Management Limited|
|Australian Ethical Australian Shares Fund||AUG0018AU||Australian shares||Australian Ethical Investment Ltd|
|Australian Ethical Balanced Fund (Wholesale)||AUG0017AU||Diversified||Australian Ethical Investment Ltd|
|Australian Ethical Diversified Shares Fund||AUG0019AU||Diversified||Australian Ethical Investment Ltd|
|Australian Ethical Emerging Companies Fund (Wholesale)||AUG0027AU||Australian shares||Australian Ethical Investment Ltd|
|AXA IM Sustainable Equity Fund||ETL0171AU||International shares||AXA Investment Managers Asia (Singapore) Limited|
|Baillie Gifford Global Stewardship Fund - Class A||FSF4018AU||International shares||Baillie Gifford Overseas Limited|
|Bell Global Emerging Companies Fund||BPF0029AU||International shares||Bell Asset Management Limited|
|Nanuk New World Fund||SLT2171AU||International shares||Nanuk Asset Management Pty Ltd|
|Pendal Horizon Fund||RFA0025AU||Australian shares||Pendal Institutional Limited|
|Pendal Sustainable Australian Fixed Interest Fund||BTA0507AU||Australian fixed interest||Pendal Institutional Limited|
|Pendal Sustainable Australian Share Fund||WFS0285AU||Australian shares||Pendal Institutional Limited|
|Pendal Sustainable Conservative Fund||RFA0811AU||Diversified||Pendal Institutional Limited|
|Pengana Axiom International Ethical Fund||HOW0002AU||International shares||Pengana Capital Ltd|
|Pengana Axiom International Ethical Fund (Hedged)||HHA0002AU||International shares||Pengana Capital Ltd|
|Pengana WHEB Sustainable Impact Fund||HHA0007AU||International shares||WHEB Asset Management LLP|
|Perennial Better Future Trust||WPC5600AU||Australian shares||Perennial Investment Management Limited|
|Perpetual Ethical SRI Credit Fund||PER1744AU||International fixed interest||Perpetual Investment Management Limited|
|Perpetual Wholesale Ethical SRI Fund||PER0116AU||Australian shares||Perpetual Investment Management Limited|
|Regnan Global Equity Impact Solutions Fund - Class R||PDL4608AU||International shares||Pendal Institutional Limited|
|Stewart Investors Wholesale Worldwide Leaders Sustainability Fund||FSF0047AU||International shares||Colonial First State Investments Ltd|
|Stewart Investors Worldwide Sustainability Fund||FSF1675AU||International shares||Colonial First State Investments Ltd|
|Vanguard Ethically Conscious Global Aggregate Bond Index Fund (Hedged)||VAN2989AU||International fixed interest||Vanguard Investments Australia Limited|
|Vanguard Ethically Conscious International Shares Index Fund||VAN8175AU||International shares||Vanguard Investments Australia Limited|
|Vanguard Ethically Conscious International Shares Index Fund AUD Hedged||VAN0848AU||International shares||Vanguard Investments Australia Limited|
While the above funds meet RIAA’s strict certification criteria and this is a great way to identify available sustainable investments, it’s important to know that not all sustainable investments have RIAA certification, so this list is not exhaustive. You should look deeper into the investment objectives and process of the manager for any sustainable investments you’re considering for your client, regardless of whether they’re certified by an industry body.
To find out more about BT Panorama, visit bt.com.au. The product disclosure statements for products available on BT Panorama and their target market determinations are available on bt.com.au.
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