Responsible Investment Principles

A tertiary education can transform lives, giving students the opportunity to access knowledge and pursue their passion. 

RMIT Philanthropy connects our community of supporters – donors, staff, alumni, industry partners and students – with University initiatives they are passionate about, to deliver strategic funding and support that advances RMIT’s ambitions.  

The generosity of our donors allows us to support students and researchers, and progress initiatives that benefit our community. 

For more information visit RMIT Giving.

The University invests through a ‘pooled funds’ structure, where investments are not directly held by the University. Pooled funds are those where there are several different types of investors whose money is ‘pooled’ and invested together. This structure provides the University with access to several different types of asset classes that are normally only available to large-scale investors, which would otherwise be very expensive and difficult for the University to invest in on its own.

The entirety of the RMIT funds are invested in two responsible investment products:

• Russell Investments Sustainable Global Shares ex Fossil Fuels Fund: a fund that invests in a broad range of global shares, with a 60% reduced exposure to carbon emissions compared to the MSCI ACWI ex Australia Index. Designed with Russell Investments’ robust decarbonisation strategy, the Fund uses a combination of carbon footprint, fossil fuel reserves, a proprietary green energy ratio and environmental, social and governance (ESG) scoring to determine the companies and their weighting within the Fund. The Fund excludes companies with fossil fuel reserves, as well as companies with significant involvement in fossil fuels. In addition to the decarbonisation strategy, other controversial industries are excluded including tobacco, cluster munitions, anti-personnel mines and nuclear weapons. The Fund’s portfolio is positively tilted towards companies with higher than average material ESG scores and will continue to evolve to reflect best practice in sustainable investing.
• Russell Investments Australian Responsible Investment ETF: a fund that invests in Australian shares and trusts listed on the ASX that also excludes companies with fossil fuel reserves. The fund is weighted towards companies that demonstrate positive ESG characteristics after negatively screening for companies that have significant involvement in a range of activities including tobacco, gambling and controversial weapons. 

The use of pooled funds means that direct investment decisions, such as whether to buy the shares in an individual company are not made by the University. Instead, RMIT works with an asset consultant to set parameters on the Environmental, Social and Governance (ESG) impacts of its investments. The asset consultant then assists the University in finding suitable investment products that best match the University’s ESG parameters.

Additionally, RMIT utilises a small component of its philanthropic funding to undertake ‘impact investing’ which is an investment designed with the intention of generating a measurable, beneficial social or environmental impact alongside a financial return. In 2019 RMIT began working with Skalata Ventures, a not-for-profit organisation that runs an independently funded seed program to scale and grow early-stage companies into significant and sustainable businesses. This fund supports future pathways and seed investment for the start-up community such as those which are developed through the RMIT Activator program.  

The Responsible Investment Principles have been in place since March 2017, they were endorsed by both the Sustainability Committee and Philanthropic Committee and then approved by the Vice Chancellor’s Executive and University Council. We established definitions behind our principles to ensure that the investment market understands our requirements and we can report in a consistent manner. For example, we define fossil fuels-related activities as including coal (coking and thermal), oil, natural gas and peat. We define companies involved in the production of tobacco and associated products as those which generate ≥10% of revenue from these related activities.

The Russell Investments Australian Responsible Investment Exchange Traded Fund (RARI) was established by a number of ethical charities and organisations to screen for thermal coal, alcohol, gambling, tobacco, pornography and armaments. RMIT has been given a seat on the RARI Responsible Investment Committee, allowing us to drive further ESG outcomes. 

In 2020, the University undertook a market scan to find a suitable international shares product which matched our ESG requirements and was committed to evolving further over time. In partnership with our external investment manager, Russell Investments, a new global sustainable investment solution was launched - the Russell Investments Sustainable Global Shares ex Fossil Fuels Fund (the Fund). The Fund goes beyond carbon reduction and seeks a fossil fuel-free exposure, excluding companies with fossil fuel reserves and companies which derive 10% or more of their revenue from fossil fuel-related activities.

The University moved to this product in early 2021, marking the final step in achieving RMIT commitment to ensuring that the portfolio minimises activities that have a material impact on climate change. 

RMIT’s principles are published on both here on our public website and in our public reporting in order for the University to remain open and transparent. The metrics to track these principles can be found in the latest Sustainability Annual Report.

'Where practicable' means that we will make every effort to implement the principles. However, there may be circumstances where we simply cannot practically address every issue.

For example, the principles state 'where practicable, the portfolio minimises activities that have a material impact on public health and wellbeing'. It is well understood that there are many health issues surrounding tobacco and that no level of tobacco is safe for consumption. It is also easy to identify and exclude any companies that are manufacturing tobacco. However, while overconsumption of sugar is also a health issue, it is much more complicated to identify and exclude companies that are responsible for the society’s overconsumption of sugar.

‘Where practicable’ is never designed to act as a loophole to avoid addressing the real intent of the principles. Rather, it reflects the real-world constraints of meeting those principles when dealing in a complex investment market.

The principles are embedded as a clause in the Philanthropy and Fundraising Policy. 

As a set of high-level commitments, approved by the RMIT Council, the University mandates that oversight for the implementation and monitoring of the principles sits with the Investment Committee. 

The RMIT Investment Committee, chaired by a member of the University Council, with representation from finance, sustainability and academic expertise works with independent experts to find appropriate investment products and guide decision-making. 

Our external investment manager, Russell Investments, are contractually required to abide by the principles. They provide quarterly reports to the Investment Committee to ensure our investments remain compliant. They also provide an annual report demonstrating that they have maintained PRI status and produced a modern slavery statement. Each year RMIT provides a summary of its investment approach in the Sustainability Annual Report. 

RMIT considers investment returns to be extremely compatible with our responsible investment objectives. As an institution that was founded on philanthropic donations in 1882, we take a long-term view on the positive impacts we can have in society and responsible investment provides investment returns and reduces risk. 

RMIT is committed to ensuring that it makes socially responsible investment decisions that align with RMIT values. The Responsible Investment Principles guide the incorporation of ESG considerations into the management of the investment portfolio of RMIT’s philanthropic funds whilst ensuring that investment management practices achieve strong financial outcomes for the University. 

For up-to-date information on the responsible investment landscape in Australia visit the Responsible Investment Association Australia website.

Absolutely, RMIT is a global leader in climate action, taking practical steps and innovative projects to become carbon neutral by 2025 and adapting to climate risks. The University also supports our local and international communities and partners to transition to a low-carbon future. Key examples of our climate action include: 

• Investing $128M in energy and water efficiency upgrades through the Sustainable Urban Precincts Program
• Since 31 March 2021, our investments have had no material exposure to fossil fuels.
• Since 1 January 2023, 100% of RMIT’s on-shore grid electricity is renewable, supplied by our two windfarm partnerships in regional Victoria. 

For more information visit our carbon and climate page. 

University Philanthropic funds are very different from superannuation funds in terms of scale, purpose and investment approach. For example, UniSuper currently has around $60 billion in net funds under management, with the sole purpose of supporting the retirement of people in the higher education sector.

For universities, philanthropic investments are targeted towards outcomes specified by the donor and follow the University’s Philanthropic and Fundraising Policy. Usually, these investments are smaller in scale than the amount of money invested by superannuation funds. Superannuation and larger-scale funds have greater control over the way the money is invested. Individuals can create change by considering how their money is invested and the banking products they use.

To find ethical and responsible super, banking and investment products for personal use visit the Responsible Returns website. 

The Principles for Responsible Investment (PRI) is the world's leading proponent of responsible investment. The PRI works with its international network of signatories to put the six Principles for Responsible Investment into practice. 

Its goals are to understand the investment implications of environmental, social and governance issues and to support signatories in integrating these issues into investment and ownership decisions.

The six principles were developed by investors and are supported by the UN. The PRI has more than 3,800 signatories from over 50 countries representing US$121 trillion of assets under management (Source 2021 data).