Responsible Investment Association of Australasia chief executive Simon O'Connor has said executive leadership spills at major Australian corporates are heralding in a new era of ESG accountability.
Writing for the ASX, O'Connor specifically named Rio Tinto as one company grappling with a new era of governance expectations as investors take ESG more seriously.
"The fallout from Rio Tinto's explosion of the sacred Juukan Gorge Aboriginal site, resulting in three executives stepping down from the company, should finally lay to rest the idea that it is only what can be measured that matters," O'Connor said.
"Mirroring the community outrage over recent events, the Australian responsible and ethical investment community - notably super funds and asset managers - has quickly and strongly responded to the recent turn of events, exercising ownership responsibilities at a new level and delivering outcomes that in its absence would have been unlikely."
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He added that RIAA's recent Responsible Investment Benchmark Report showed that responsible investment now represents 13% of Australia's $3.155 trillion in professionally managed assets - a rise of 17% from 2018.
"The executive leadership spills across major Australian publicly listed companies in recent months herald a new era of accountability for large corporates and how they engage around environmental, social, cultural and governance themes," O'Connor said.
He said that there is now an expectation among investors and the community that companies factor in people, society and the environment alongside financial performance and that this will help them better navigate turbulent times, avoid big risks and capture more opportunities.