The Responsible Investment Association of Australia (RIAA) announced 61 “responsible investment leaders” for the year in Australia, marking an 11% increase on the previous year, as it identified “continued momentum” in responsible investing.

It also identified 29 “responsible investors”, which marked a 26% increase from 2023.

The recognition is based on the RIAA’s Responsible Investing Scorecard, which assesses asset managers on their commitment to responsible investing, including the integration of environmental, social and governance (ESG) factors into decision-making, strong governance and transparency in reporting of social and environmental outcomes.

According to the RIAA, responsible investment leaders represent the top 20 percent of investment managers rated, while responsible investors are those who receive at least 15 out of 20.

Among the 61 firms recognized as responsible investment leaders for 2024 were PIMCO, Nanuk Asset Management, Betashares, Ausbil, First Sentier Investors, Nuveen, Magellan, Pendal, T. Rowe Price and Australian Ethical.

Meanwhile, responsible investors include Equity Trustees, Platypus Asset Management, Vanguard Investments and Pengana Capital.

"It's extremely encouraging to see such strong progress, even after raising the standard last year," said Estelle Parker, co-executive director of the RIAA, highlighting increased scrutiny of the industry and increased regulatory action over the past year.

“The fact that more investment managers have met these higher expectations shows that organizations are taking on the challenge and upping their game.

"Not only are more of them doing it — they're also getting better at it."

Over the past year, a number of sustainability claims have been thrust into the spotlight, such as the Australian Securities and Investments Commission's first court victory in March, when the Federal Court ruled that Vanguard had breached the law by making misleading claims about certain environmental , social and governance (ESG) exclusion screens applied to investments in an index fund managed by the firm.

The fund manager was later fined $12.9 million.

Similarly, two super funds – Active Super and Mercer Super – have been found to have breached the law in relation to the presentation of their sustainability credentials.

Mercer Super was ordered to pay a fine of $11.3 million in early August by the Federal Court, while Active Super is expected to appear in court at a later date.

The RIAA's Parker continued that the organization continues to uphold a "deeper commitment" to responsible investment practices.

“This is not about short-term fixes; it's about taking a long-term, holistic business approach to building more sustainable and resilient markets,” she said.