RAM believes that identifying and managing ESG factors helps in finding new opportunities, steering capital towards more attractive areas, and managing long-term investment risks. As a result, it is expected that returns will be higher, and downside risks lower, over the long term. These benefits arise from avoiding the poor performance and enterprise failures that can arise from lax governance, and weak environmental, regulatory and social practices.
ESG integration is tailored to the investment strategy and portfolio objectives. Some of our strategies have more formal ESG screening and integration whilst some strategies are more passive in nature designed to achieve specific investment outcomes with strict investment universe rules where ESG screening is limited. Clients can also set their own specific rules within their customised investment mandate to provide an additional layer of constraints.
The purpose of integrating ESG risk factors is to make better investment decisions and improve understanding of risks within portfolios. As part of our portfolio management process for our Diversified Fixed Interest & Credit strategy we monitor companies to maintain our exclusion list on a regular basis with focus on:
For example specifically excluding investment in companies involved in the production of alcohol, gambling activities, munitions, tobacco or coal mining.
As part of our research process we can specifically exclude companies where there are serious governance risks/failures, violation of human rights, serious environment risks or other significant violations of ethical norms which may impact the businesses operations.
RAM recognise the importance of ESG considerations when managing investment portfolios and specifically build portfolios to achieve specific objectives with minimal risks – including risks from ESG.
We recognise clients entrust us, as fiduciaries to manage their wealth and manage the strategy in line with the investment objectives, risk constraints and investment universe.
We take a prudent approach when selecting investments for our clients and take a long-term approach to portfolio management.
Our managed account solutions provides transparency on all holdings and investment transactions within the portfolio at all times.
The RAM Diversified Fixed Interest & Credit Strategy specifically has a formal universe exclusion to companies which operate within the following industry groups. This sector exclusion acts as a hard universe restriction and companies within these sectors are not eligible for portfolio inclusion.
The RAM Diversified Fixed Interest & Credit Strategy and RAM Interest Rate Securities strategy scores issuers on a range of metrics with a number being specifically related to ESG factors including:
We recognise the importance of strong risk management in organisations we invest in and specifically focus on Environmental, Social and Governance risks and disclosure as part of our investment process. Like all investment risks, there is significant risk from poor behaviour or limited reporting which can have significant costs to investors. For example, reputational risks can impact sentiment, and risk premiums as well as the ability of the company to access suitable business funding. There can be direct significant costs/fines or loss of customers, which impacts profitability and balance sheets from illegal or unethical activities.
There have been many academic studies highlighting the linkage between ESG factors and investments risk and returns. Governance plays a key role given it is management that are responsible for honouring the terms of issue and making the promised payments and the agreed times for debt securities.
We consider ASX listed companies annual reporting and disclosure for compliance with regard to these factors and ASX listing ESG disclosure requirements, as well as direct meetings with management where further research is required. As a direct outcome of our research we can exclude specific companies and securities from investment, based on our view of risks and expected returns.
We supplement our internal research with consideration of Bloomberg ESG scoring as part of the research process.
RAM is committed to integrating Environmental, Social and Governance considerations into our operations and investment strategies.
Ensuring assets are benchmarked by National Australian Built Environment Rating System (NABERS)
Increasing implementation of energy-efficient products, renewable energy, and minimisation of waste generation
Engaging and providing growth opportunities for metropolitan, regional, and/or rural locations and communities
Conducting thorough due diligence on all key counterparties to ensure compatibility with RAM ESG standards
Good governance, social responsibility and sustainability are key pillars of RAM’s culture, evidenced by the below initiatives:
RAM is a member of the Financial Services Council (FSC). The FSC promotes best practice for the financial services industry by setting mandatory Standards for its members and providing Guidance Notes to assist in operational efficiency.
The FSC is engaged in advocacy concerning the development of the social, economic and regulatory framework in which its members operate, thereby helping them to better serve their clients and customers.
The members represent Australia’s retail and wholesale funds management businesses, superannuation funds, life insurers and financial advisory networks. The Members represent the professional services firms such as ICT, consulting, accounting, legal, recruitment and research houses.
Responsible Investment Association Australasia (RIAA) champions responsible investing and a sustainable financial system in Australia and New Zealand and dedicated to ensuring capital is aligned with achieving a healthy society, environment, and economy. With over 400 members who collectively managing more than $9 trillion in assets globally, RIAA is the largest and most active network of people and organisations engaged in responsible, ethical and impact investing across Australia and New Zealand.
Institute of Managed Account Professionals (IMAP) is the only industry organisation for advisers, managers, providers and other businesses actively involved in offering or supporting Managed Accounts.
The goal of IMAP is to assist managed account professionals by providing: Information, Education and Representation.
The Australian Investment Council is the voice of private capital in Australia. The members partner with businesses across every sector of the market to help them grow, while supporting their local communities and creating new employment opportunities. Businesses backed by private capital investment make a significant contribution to growing the nation’s economy.
The Alternative Investment Management Association (AIMA) is the global representative of the alternative investment industry, with around 2,000 corporate members in over 60 countries. AIMA’s fund manager members collectively manage more than $2 trillion in hedge fund and private credit assets. AIMA draws upon the expertise and diversity of its membership to provide leadership in industry initiatives
A proactive and transparent approach to ESG is linked to value creation and RAM is committed to making a positive contribution to the communities in which it operates. We strive to be a company that makes a positive impact on our clients, our broader communities, and our planet.
RAM has been recognised for its commitment to closing the gender pay gap. Scott Kelly – CEO Australia, has been appointed as a Pay Equity Ambassador by Workplace Gender Equality Agency (WEGA) after RAM voluntarily signed up for its program which encourages equal pay across workplaces in a range of sectors.
WGEA is an Australian Government statutory agency that promotes and improves workplace gender equality.
Testament to its commitment to diversity and inclusion, RAM has been named an Inclusive Employer 2021-2022 by Diversity Council Australia (DCA).
The accreditation comes off the back of DCA’s nationally representative survey of workplace inclusion – Inclusion@Work Index. Every two years, Australian organisations are able to participate in DCA’s Inclusion@Work Member Index, which enables them to measure diversity and inclusion in their workforce and compare findings to a National Index Benchmark.
RAM is committed to advocating for diversity and equality. We support, respect and value the diversity of our people and stakeholders. RAM is a proud member of Diversity Council Australia (DCA), an independent not-for-proﬁt peak body leading diversity and inclusion in the workplace. DCA has over 900 members, many of whom are Australia’s business diversity leaders and biggest employers.
With the full commitment of the RAM Board, the Real Giving Programme encourages and promotes our combined generosity towards issues of social and environmental importance to our communities.
The programme runs to the Australian financial year, with the goal of donating at least 1% of our profits to a range of charitable organisations. It also provides volunteer time and donations matching initiatives to support our team’s wide charitable interests.
WiBF’s vision is to create a tangible, positive impact in the Australian banking and financial services sector that will lead to improved gender diversity and inclusive leadership practices across the sector.
WiBF has worked in close collaboration with corporate members to develop an understanding of the business sense and strength behind gender diversity. WiBF’s programs have been designed to grow the pipeline of women across all career stages of the industry.
RAM supports the One Million Donors programme and is a certified Workplace Giving Supporter.
The programme was developed by Workplace Giving Australia, with the goal to see one million Australians making donations to charity direct from their pay – with this cost effective approach to fundraising having the potential to transform the giving landscape in Australia.
The Victorian Chamber of Commerce and Industry is the largest and most influential business organisation in Victoria. Founded in 1851 with the aim to make Melbourne one of the world’s great free ports, today we continue leading business into the future through advocacy, leadership and services focused on innovation and growth.