CALL FOR IMPROVED CERTIFICATION STANDARDS
AUSTRALIA’s leading ethical funds have called on the responsible investment association of australia to update ETHICAL certification standards to require the exclusion of nuclear WEAPONS.
Leading ethical funds Future Super, Verve Super, Crescent Wealth and Christian Super have, in an open letter to the Responsible Investment Association of Australia, called for improved certification standards for ethical funds.
Currently, the RIAA certification program does not require the exclusion of nuclear weapons, despite their illegality and status as disproportionate weapons of mass destruction.
The RIAA provides an invaluable service to investors who wish to invest ethically. For investors who wish to exclude nuclear weapons, however, the RIAA standards don’t provide sufficient clarity.
Additionally, the RIAA standards don’t reflect developments in international law that clearly establish nuclear weapons as illegal and controversial weapons.
RIAA is well known for its responsiveness to member and investor perspectives – Quit Nukes looks forward to continuing its positive engagement.
RESPONSE FROM RIAA CEO, SIMON O’CONNOR
RIAA acknowledges the significance of the Treaty on the Prohibition of Nuclear Weapons in now prohibiting nuclear weapons by international convention.
We have been monitoring this Treaty and how the countries we operate in – Australia and New Zealand – will act on this Treaty, as well as the broader implications of such an international convention coming into force.
RIAA is already in the midst of reviewing its assessment guide which informs RIAA’s Responsible Investment Certification Program for its requirement around ‘avoiding significant harm’ with a view to broadening the scope to also require the exclusion of nuclear weapons within new products seeking certification and existing products seeking recertification.
This is work that has been ongoing this year, as we monitor how this is likely to be ratified and implemented in our own markets. This has involved flagging this development at our Certification Program masterclass earlier this year, and having put this on the agenda of our Certification Program Technical Expert Group. At the same time, we’ve been making new applicants to the Program aware of the emerging implications of this Treaty, particularly in the NZ market where the Treaty has been ratified.
RIAA is already committed to working with and bringing the investment industry on board with this pending change, which includes importantly working with research and index providers, as well as our members. This work is ongoing.
Whilst RIAA is constantly focused on changing norms, conventions and laws, we need to balance this within our regular annual cycle of updates to our Certification Program Standard and Guidance. When we make such a change, we will ensure this has been socialised with our members, thoroughly researched and justified, and implemented in a staged manner consistent with the renewal cycles of the Certification Program.
Under our regular cycle of updates to the Program, and pending the outcome of our engagement with members, this would likely be an inclusion in the Certification Program guidance brought into force in January 2022. Under our Program, members would then have 12 months or until their next renewal, to ensure they are in compliance with this requirement.
We would be happy to keep you informed of the progress towards this change.