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victory for SRI activists in Australia

May 2005

The Ethical Investment Association (EIA) has won its case to have a phrase removed from an official Australian document suggesting that socially responsible investment may be more costly than average investments.

The Australian government's consumer advisory warnings on superannuation public disclosures and managed investment products were to have reminded investors to ask themselves whether 'ethical and social considerations' would justify higher costs and fees.

But the EIA protested: 'To the best of [our] knowledge there is no evidence conclusively demonstrating a link between an SRI and ethical investment style and comparatively higher fees. While fees are an important consideration, particularly in an environment of choice of superannuation, the proposed statement ... ignores that other investment strategies may often carry "higher costs" as well.'

After being lobbied the treasury agreed to remove the reference in the warnings. The EIA responded: 'One of the ongoing challenges to increasing funds under management in SRI is overcoming the perception that consideration of non-financial factors means lower returns or higher costs. If the initial draft ... had been accepted, this perception would have been further entrenched in the Australian investment psyche.

'Instead, through working together with other industry partners, the EIA has successfully prevented an outdated and unfounded attitude gaining even greater credence.'



Further Information
http://www.eia.org.au
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