Ethical Performance
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Don't get complacent on SRI, Australians told

December 2005

Australia seems to have lost its understanding of what sustainability and socially responsible investment mean, ethical investors were told in a recent speech by Tessa Tennant, chair of the Association for Sustainable and Responsible Investment in Asia.

Tennant, addressing the Ethical Investment Association in Sydney, was warning Australians against allowing complacency to blunt their SRI initiatives.

She suggested one way of staying focused was to confront contentious issues. She recalled that the UK Social Investment Forum helped SRI investors to influence standards in the UK water industry when it was privatized in the 1990s, and believed the Ethical Investment Association could perform a similar role in Australia. For example, the association could stimulate the debate on investing in nuclear power and integrated energy solutions.

Another way of encouraging SRI policies was to invest in industries of the future rather than emphasizing best-of-sector strategies and engagement. Tennant said companies concentrating on best-of-sector and engagement policies needed to have a challenging agenda and be more open to collaborative action with socially responsible investors.

However, she noticed that SRI enthusiasts were often at loggerheads with companies, rather than leading the way on collaboration. She said: 'Other groups such as the Global Corporate Governance Network are showing what can be done. Surely we can do better.'

Tennant pointed out that ASrIA was established because Asia, with its scale and pace of change, could determine the planet's fate. She said: 'If everyone in the world is to have the same standard of living as people in OECD [Organization for Economic Co-operation and Development] countries do, under current systems of production and consumption, then we need at least three, possibly five, planets' worth of resources.'

Sustainable investment would be vital if this came about. Tennant asked her Australian audience: 'Are you going to let Europe stitch up the clean-tech business in your doorstep markets of Asia or are you going to be dominant players?'

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