Disclaimer
BY CLICKING ON “I AGREE”, I DECLARE I AM A WHOLESALE CLIENT AS DEFINED IN THE CORPORATIONS ACT 2001.
What is a Wholesale Client?
A person or entity is a “wholesale client” if they satisfy the requirements of section 761G of the Corporations Act.
This commonly includes a person or entity:
who holds an Australian Financial Services License
who has or controls at least $10 million (and may include funds held by an associate or under a trust that the person manages)
that is a body regulated by APRA other than a trustee of:
(i) a superannuation fund;
(ii) an approved deposit fund;
(iii) a pooled superannuation trust; or
(iv) a public sector superannuation scheme.
within the meaning of the Superannuation Industry (Supervision) Act 1993that is a body registered under the Financial Corporations Act 1974.
that is a trustee of:
(i) a superannuation fund; or
(ii) an approved deposit fund; or
(iii) a pooled superannuation trust; or
(iv) a public sector superannuation scheme
within the meaning of the Superannuation Industry (Supervision) Act 1993 and the fund, trust or scheme has net assets of at least $10 million.that is a listed entity or a related body corporate of a listed entity
that is an exempt public authority
that is a body corporate, or an unincorporated body, that:
(i) carries on a business of investment in financial products, interests in land or other investments; and
(ii) for those purposes, invests funds received (directly or indirectly) following an offer or invitation to the public, within the meaning of section 82 of the Corporations Act 2001, the terms of which provided for the funds subscribed to be invested for those purposes.that is a foreign entity which, if established or incorporated in Australia, would be covered by one of the preceding paragraphs.
Sustainable Investing
Greenwashing
Greenwashing is the practice of trying to make people believe that a company is doing more to adopt sustainability than it really is, often for public relations reasons.
Some claim to be more sustainable when they are in fact only making token gestures towards it. For a company, this could be doing something like claiming to have cut a carbon footprint by installing sensors that turn lights off to save energy, when the underlying business is highly polluting.
For an asset manager, greenwashing could be making a small gesture towards sustainability, such as by excluding an obvious candidate from portfolios like a weapons manufacturer, while not applying environmental, social and governance (ESG) factors to the rest of the portfolio. It could also be the case that if an asset manager has a very small proportion of its total assets under management engaged in sustainability – say 1% - then the other 99% is not sustainable. That is also greenwashing.
As a pioneer of sustainable investing, Robeco has long believed that true sustainability means three things. Firstly, strategies that only apply simple exclusions and are still labeled as being ‘sustainable’ should be a thing of the past. There should be more to sustainable investing than just using a negative screen.
Creating returns that benefit the world we live in
Secondly, a strategy can only really be sustainable if it is also financially sustainable. How do long-term ESG trends and external costs such as climate change, loss of biodiversity and rising inequality lead to changes in business models? This means thinking hard about how sustainability affects companies and investment strategies.
Thirdly, active ownership is important. Truly sustainable investors will use voting and engagement to encourage companies to become more sustainable. Passive strategies, for example, cannot do this – they simply scoop up the wheat with the chaff.
To try to make things clearer, and avoid greenwashing, the EU is in the process of defining an ecolabel, so that the public can trust what is said to be sustainable. Other ‘SRI’ labels can be misleading. In Robeco’s view, if a strategy doesn’t have ESG properly integrated, it’s greenwashing.