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Estelle Parker

With increasing attention on greenwashing in finance, the largest and most comprehensive responsible investment conference in the Southern Hemisphere, RI Australia 2023, will take place in Melbourne and online on 10-11 May 2023. Held by the Responsible Investment Association Australasia (RIAA), the two-day conference will bring together more than 800 sustainability leaders and industry practitioners with 90 expert speakers across more than 30 sessions to demonstrate best practice in the burgeoning sustainable finance sector.

This year’s theme is “Scaling new heights in ESG and impact”, and RIAA’s Executive Manager, Estelle Parker, says it comes at a time when the responsible investment industry is facing a reckoning to deliver on the positive outcomes promised and combat greenwashing. “The industry has been thrust into the sights of governments, regulators, and not least its clients who care about the impacts of their investments. No one can afford to not be paying attention right now,” she says.

The efforts of regulators to address greenwashing will be a significant focus; with Karen Chester, Deputy Chair at the Australian Securities and Investments Commission, delivering a keynote address on ASIC’s direction. Dr. Sean Carmody, Executive Director of the Australian Prudential Regulation Authority, will join the discussion on how Australia’s forthcoming sustainable finance taxonomy will provide much needed definitions of what constitutes a sustainable investment.

A session Estelle predicts will draw significant attention is cheekily titled “ESG: Woke & Broke?”. This session will delve into the current political attack on ESG investing by far right conservative elements in the US, and explore whether this could happen in Australia and elsewhere. Fiona Reynolds, Independent Director and Advisory Board Member who will be speaking during this opening session says, “we need to prevent ESG becoming the political football. How do we as an industry stop ESG from entering the culture wars? This isn’t just a US issue, it impacts all global investors.” Estelle Parker says that, ultimately, ESG is not political, “it constitutes good investment practice and is mainstream now. Investors don’t want governments preventing them from considering certain risks in investment decision making.”

RIAA’s research shows that approximately $726 billion in assets under management in Australia is now managed via a stewardship or corporate engagement approach. Stewardship codes have proliferated around the world. Prominent amongst these is the UK’s, which sets a high bar to entry, and has provided a blueprint for further stewardship codes globally. “This is why we invited Claudia Chapman, Head of Stewardship at UK’s Financial Reporting Council to be one of our international keynote speakers. She will share her experience developing and implementing the UK Stewardship Code and explore where next for stewardship. I would expect the growing focus on collaboration and systems change to achieve positive real-world outcomes will form part of this,” says Estelle.

While undoubtedly a step in the right direction, RIAA research shows a perception that the growth in corporate engagement and stewardship may be flooding corporate boards with a sea of requests from investors. A panel session including corporate leaders such as Patricia Cross from OFX, Dr. Guy Debelle from Fortescue Future Industries, and Mark Rigotti CEO of the Australian Institute of Company Directors (AICD) will provide insights on what corporate engagement looks from the inside and practical advice for investors to work more collaboratively to alleviate the burden on companies and achieve the real-world outcomes desired.

RI Australia 2023 will place a spotlight on First Nations luminaries. Karen Mundine, CEO at Reconciliation Australia, and Phil Usher, CEO at First Nations Foundation, will speak on Voice to Parliament and how investors be a genuine partner in reconciliation and self-determination. Professor Peter Yu AM, Vice President (First Nations) at ANU, Benson Saulo, the first Indigenous person to be appointed an Australian Consul-General, and Leah Armstrong, Managing Director at First Australians Capital, will speak on First Nations investment markets. Ian Hamm, Chair of the Indigenous Land and Sea Corporation and new Board member of the AICD, will speak on Caring for Country and how investors can partner with First Australians.

Russia’s invasion of Ukraine was a wake-up call for investors, and RIAA’s Human Rights Working Group has been busy working on a guide to navigate investing that may be affected by armed conflict-related issues with experts from organisations like the Australian Red Cross. Delegates at the conference will be presented with the exclusive launch of the ‘Investors and Armed Conflict: A Guide’, a toolkit that provides essential frameworks and insights for investors and companies seeking to protect human rights and mitigate risks associated with armed conflict. “This is going to be a vital toolkit for investors to support human rights in conflict-affected regions like Ukraine and Myanmar, and what they can do before, during and after conflict,” says Estelle.

RI Australia 2023 is set to be a jam-packed conference with sessions covering a diverse range of topics, from modern slavery and workplace culture to big tech, human rights and reputation management. There will be interactive workshops on target-setting and promoting ESG within organisations, as well as sessions tailored to financial advisers, including responsible investment for beginners, and advice on how to construct a good responsible investment portfolio. Attendees will also gain insights into consumer research and demand.

With over 500 members representing US$29 trillion in assets under management, RIAA is dedicated to ensuring capital is aligned with achieving a healthy society, environment and economy.

“Not only is the program comprehensive featuring the latest trends and emerging issues, we see this as an unique opportunity for attendees to develop their skills and knowledge, make connections and explore growth opportunities in the sustainable finance space,” says Estelle

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The bank bill swap rate (BBSW) rate is a major interest rate benchmark for the Australian dollar and is widely referenced in many financial contracts. Previously, BBSW was calculated from the best executable bids and offers for Prime Bank securities. A major concern over recent years has been the low trading volumes during the rate-set window, the period over which the BBSW is measured.

The new BBSW methodology calculates the benchmark directly from market transactions during a longer rate-set window and involves a larger number of participants. This means that the benchmark is anchored to real transactions at traded prices. ASX, the administrator of BBSW, has consulted market participants on this new methodology. In addition, the ASX has recently conducted a successful parallel run of the new methodology against the existing method.

RBA Deputy Governor Guy Debelle said, ‘The new methodology strengthens BBSW by anchoring the benchmark to a greater number of transactions. This should help to ensure that BBSW remains robust.’

ASIC Commissioner Cathie Armour said, ‘A transaction-based BBSW supports the market’s trust in the robustness and reliability of BBSW.’

‘ASIC and the RBA expect all bank bill market participants – including the banks that issue the bank bills, as well as the participants that buy them – to adhere to the ASX BBSW Guidelines and support the new BBSW methodology. The rate-set window is the most liquid period in the bank bills market, and market participants are therefore likely to get the best outcomes for their institutions and their clients by trading during this time.’

‘We expect market participants to put in place procedures so that as much trading as possible happens during the rate-set window.

This change follows passage through the Parliament in March of legislation that puts in place a framework for licensing benchmark administrators. Consistent with the approach taken in a number of other jurisdictions, it also made manipulation of any financial benchmark, or products used to determine such a benchmark, a specific offence and subject to civil and criminal penalties.

ASIC intends shortly to make financial benchmark rules, on which ASIC consulted in 2017. ASIC also expects to declare BBSW, and a number of other financial benchmarks, as ‘significant benchmarks’ in Australia and to license the administrators of those significant benchmarks.

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