The hidden impact of your KiwiSaver funds
written as a guest entry by Mindful Money
Most Kiwis are aware of the ways that their purchases have an impact on climate change, the environment, or people.
Not buying factory-farmed eggs or cosmetics tested on animals. Choosing fair trade, less carbon-intensive or lower waste products. Walking more and driving less. These are all small changes in our lives that collectively put pressure on companies to change their behaviour.
Investing is no different. How we choose to invest our money makes a real impact.
New data analysis from charity Mindful Money shows that KiwiSaver investments in companies the public want to avoid have hit record levels. Across all KiwiSaver funds, there is $8.6 billion of funds invested in issues that the public want to avoid. This amounts to 8.9% of total KiwiSaver funds.
Kiwis have been clear in annual surveys that they do not want to invest in companies that cause harm to the climate, to the environment, to animals and to society. Yet many funds continue to invest in those companies of concern.
The level of KiwiSaver investment in harmful companies has never been higher. While most KiwiSaver providers say they are investing responsibly or using an ESG (Environmental, Social and Governance) framework, only a few funds are comprehensively avoiding investments in harmful companies. Most are continuing to invest a significant proportion of the public’s funds in issues that Kiwis want to avoid.
What could your KiwiSaver fund be invested in?
Here’s a quick breakdown based on our findings:
Fossil Fuels: $3.2 billion is invested in the fossil fuel sector. While some oil and gas companies are vocal about their transition plans towards renewable energy, significant capital is increasingly flowing into fossil fuel operations.
Animal Cruelty: $2 billion is invested in companies associated with animal cruelty, including products tested on animals (for reasons other than human health), factory farming, fur and the use of animals for entertainment.
Human Rights Abuses: $1.4 billion is invested in companies linked to human rights violations, such (digital harm and breaches of privacy), the mining company (community harm) and (product safety).
Social Harm: KiwiSaver funds have over $1 billion invested in sectors such as alcohol, pornography, gambling, and tobacco.
Weapons: About $292 million is associated with weapons manufacturers, including firms that produce nuclear armaments.
What can you do about it?
The good news is there’s a very simple solution - you can join thousands of other New Zealanders who have checked their KiwiSaver funds and found a new fund that fits their values.
Understanding where your money goes is the first step. Mindful Money has done the research so you don't have to. You can use the fund checker tool, which will show you what companies your KiwiSaver or Investment funds are supporting.
If your current investment doesn't align with your values, consider making a switch; it's quick, easy, and free!
Choose a fund that suits you.
Mindful Money is an independent charity that has created a Mindful Ethical Fund Finder tool, which can help you find the funds that meet your needs.
You will have to answer three questions:
What do you want to avoid investing in?
What investment approach is important to you?
What is your risk profile?
Mindful Money’s Fund Finder tool can assist in matching you with a fund that suits your preferences and risk tolerance.
Switching your KiwiSaver or other investment funds can be a straightforward process that takes less than 15 minutes!
Will I have to sacrifice returns?
This is the best part. Not only is it a sound moral decision to stop supporting companies that are harming the climate, the environment, animals, and society - but it's also a sound financial decision.
Long-term studies show that, on average, responsible investing earns as much or more than conventional investing with lower risks
Already moved your money to an ethical KiwiSaver fund? Well done on staying ahead of the curve. Spread the word so others can make their money a force for good too.
