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More milestones on our responsible investing journey

Profile of Nicole Richards
Written by Nicole RichardsPosted on 2/6/2021

Australian Communities Foundation’s journey towards 100% responsible investing has reached two new milestones: the first, as the only foundation in Australia to become a signatory to the UN Principles for Responsible Investment (UNPRI) and the second being the announcement of the Foundation’s first impact investments.

Michael Gilmore, Director and Chair of Australian Communities Foundation’s Investment Committee says the two impact investments make a significant contribution to positive impact in alignment with the organisation’s mission.

“For the first time we are making investments that are not only beneficial to society but are actively contributing to solutions to some of society’s great challenges,” Michael says, adding that the journey has been years in the making.

“Over the past few years, we’ve taken a much bigger step by embarking on the journey to 100 per cent responsible investing by 2021…”

“In the early years of our responsible investing journey we commenced by implementing negative screens, for example not investing in companies that participated in tobacco or gambling,” he explains.

“Over the past few years, we’ve taken a much bigger step by embarking on the journey to 100 per cent responsible investing by 2021 and signing up to the Divest/Invest pledge to remove fossil fuels from our portfolio and invest in clean energy solutions.

“Along the way we’ve changed our governance structures, investment policies, Investment Adviser and also added expertise to our Board and Investment Committee, to support our focus on responsible investing.”

Using the ABC framework (Avoiding harm, Benefiting society and Contributing to solutions), Australian Communities Foundation now strives to have the majority of its investments in the B or C categories.

Mark Ingram, Chief Impact Officer at ACF’s investment advisory firm, Brightlight, says the move is a significant one because it “means that Australian Communities Foundation is now positively moving capital in its portfolio in order to create intentional and measurable social and environmental impact in sectors of the economy that are underserved.”

The impact investments

Tim McCready, Chief Investment Officer at Brightlight, says impact does not come at the expense of financial performance.

“What we’re looking for with these investments is strength in both financial prospects and impact outcomes,” he says.  “Both of these investments offer that.”

The two selected impact investments, Infradebt Ethical Infrastructure Fund and Side by Side Social Impact Bond, closely align with Australian Communities Foundation’s mission, and align with two of our four impact areas: environment and First Nations self-determination.

Side by Side blends the public sector and private investors to allow social service providers to create innovative programs address entrenched social challenges in the Australian schooling system,” Mark explains. 

The Side by Side Social Impact Bond has been developed as a partnership between Berry Street Victoria and the Victorian Aboriginal Child Care Agency (VACCA).

Adjunct Professor Muriel Bamblett, CEO of VACCA says, “Investing in families and strengthening communities is key to preventing disadvantage and building better education outcomes for our children. Side by Side is a multifaceted program that supports children where they need it most and attempts to address systemic barriers Aboriginal children face when attending school.”

The second impact investment, Infradebt, will build new solar and wind energy infrastructure that aligns to the safeguarding the environment focus area.

“Finance for renewable energy infrastructure in Australia is an underserved market so this investment contributes to the flow of capital to solve our global climate challenge and also provides a proof point in the trust and foundation market of zero trade-off between risk adjusted market rate returns and positive impact contributions,” Mark says.

“The more we can demonstrate the demand for investments of this type, the faster the opportunities will develop and the more we will be joined by other like-minded investors.”

Looking ahead

With the help of Brightlight, Australian Communities Foundation will continue to look for investments that deliver both financial and impact outcomes.

For long-time Australian Communities Foundation supporter, sub-fund holder and Director, Sue Dahn, the Foundation’s journey to 100 per cent responsible investing will pay tremendous dividends.

“At Australian Communities Foundation we are committed to donor‘s contributed capital not only NOT doing harm in the places it is invested but, wherever possible and as opportunities become available, actually DOING good by being applied to solving the communities pressing problems and challenges,” Sue says.

“The more we can demonstrate the demand for investments of this type, the faster the opportunities will develop and the more we will be joined by other like-minded investors.”

“We are extremely proud to be the first Australian philanthropic foundation to become a signatory to the Principles for Responsible Investment.”

UNPRI: Principles for Responsible Investment

The United Nation’s Principles for Responsible Investment encompass six investment principles that incorporate ESG issues into investment practice.

In a process convened by the United Nations Secretary-General, the Principles for Responsible Investment were developed by an international group of institutional investors reflecting the increasing relevance of environmental, social and corporate governance issues to investment practices.

“We are extremely proud to be the first Australian philanthropic foundation to become a signatory to the Principles for Responsible Investment,” says Australian Communities Foundation CEO, Maree Sidey.

“We hope that other organisations in our sector will also consider becoming signatories.”

“This is another pioneering, trailblazing effort by ACF,” Mark Ingram from Brightlight adds. “Their commitment to these stringent principles is to be applauded.”

Details of the signatories’ commitment can be found here.