Ethical Investing – introducing RIAA certification on Flint
Written: 08 April 2022
Author: Jono O’Grady
3 min read
Ethical investing has become a hot topic in the managed funds investment arena. Investors around the world are increasingly wanting their money to do good while generating a return. In our very own backyard, we’re seeing ethical investing become a talking point with the proliferation of ethical funds and investment managers focusing on environmental, social and governance factors for investing (ESG investing).
At Flint we celebrate this. We recognise the fact that New Zealanders are wanting information on where their money is going and want to invest in ethical funds. That’s why we’re excited to share that we are the first investment platform in New Zealand to display information on fund RIAA certification. Here’s what that means for ethical investing in New Zealand:
Introducing RIAA certification
As an insights-led investment platform we want to make it easier for New Zealand investors to have access to information on ethical investing. Flint Wealth has partnered with the Responsible Investment Association Australasia (RIAA) and has recently become an affiliate member. RIAA is the membership organisation that ‘champions responsible investing and a sustainable financial system in Australia and New Zealand.’ As of March, we now display RIAA certification against certified funds on Flint. Have a look when you’re next on Flint – you can now filter by RIAA certified funds and read up on their certification. These funds include:
- Pathfinder Global Water Fund
- Harbour Australasian Equity Focus Fund
- Harbour Australasian Equity Fund
- Harbour Sustainable NZ Shares Fund
The value of certification
Certification is a helpful way of knowing that a fund is investing ethically. A RIAA certified fund on Flint means that ‘a product or service has implemented an investment style and process that systematically takes into account environmental, social, governance or ethical considerations, and this investment process reliability has been verified by an external party.’
At Flint we always encourage investors to be informed, to do their own research and invest in their personal knowledge of a fund, fund manager or certification scheme before making an investment decision. Offering RIAA information on Flint is one way that we can assist investors with their own research.
What you can do to invest ethically
If ethical investing is important to you then certification can be a helpful starting place. However, certification is only one way of knowing that a fund is investing ethically. RIAA certification is relatively new in the history of investing in Australasia, so it pays to dig a little deeper and consider each fund or fund manager on their merits. There are great funds on the Flint platform that champion ethical investing which may not be RIAA certified. Ethical investing is about values alignment. It’s about ensuring that the things you invest in align with your personal values. There is also nuance when it comes to investing ethically.
There are different ways to invest ethically or responsibly but most of them can be summarised by three main approaches:
Many ethical funds focus on exclusions. They screen out companies or sometimes even entire industries that are known to cause harm. Some of the most common investment exclusions areas are: Adult Entertainment & Pornography, Alcohol, Animal Testing, Fossil Fuels, Gambling, GMO’s, Human Rights and Environmental Violations, Palm Oil, Tobacco and Weapons.
Many fund managers now have ESG criteria for assessing and evaluating the companies they invest in. This layer of evaluation can provide confidence that a fund is investing responsibly.
Targeting investment towards better companies
Some fund managers specifically target their underlying investments towards companies with high ESG and sustainability standards.
Another approach to sustainability is impact investing. This is when a fund manager focuses on creating a measurable, positive impact. There are several funds on Flint that have investment objectives that align with impact investing. If you’re interested in impact investing, then check out the investment objectives of each fund on Flint.
Investing in ethical funds on Flint
There are different types of funds on Flint that are RIAA certified. You can access information on each of these funds on Flint. All investments involve some degree of risk, research, due diligence and crystal ball gazing. The good thing about every ethical investment on Flint, is they have been handpicked by reputable fund managers that have years of industry experience across numerous asset classes and fund styles. We’d encourage you to do your own research, read through the information available on Flint and think through your own personal approach to ethical investing.
IMPORTANT NOTICE AND DISCLAIMER:
All content shared is of a general nature, current to the time it was penned, and is not financial advice. Before making any investment decisions, please be sure you have completed full due diligence. This should include reading the product disclosure statement (PDS), considering fees and taxation, identifying your time horizons, and understanding the performance history and reputation of the investments you are considering.
Please note: When investing you are not guaranteed to make money (and on occasion you may lose some or all of the money you began with). Seek independent advice to establish if an investment is suitable for your financial situation and long-term wealth generation goals.