We’re committed to Responsible Investment, which is incorporated throughout our investment process.
Responsible Investment is the practice of incorporating environmental, social and governance (ESG) principles into the investment process, from investment selection all the way through to how we report on how our clients’ funds are invested. The most visible part of our Responsible Investment approach is the ‘exclusions list’ - a list of companies that we do not invest in due to the severe social and environmental harm they cause, or because of their involvement in unethical or illegal activities.
More generally, through analysing the ESG profile of companies we invest in, we are able to enhance the expected performance of our portfolio by avoiding those companies with high ESG-related risks, and investing more in companies with limited amounts of ESG risk.
We are committed to Responsible Investment and have a long-standing Responsible Investment Policy.
Our Responsible Investment Policy applies to every investment decision we make for all of our products - our Kiwi Wealth KiwiSaver Scheme, Private Portfolio Service and superannuation scheme.
Our Responsible Investment Policy sets out the principles for identifying those companies with severe ESG issues that should be excluded from our portfolio. Our primary focus is on avoiding investing in companies which significantly victimise people or the environment, or that are widely involved in unethical or illegal activities.
Identifying such companies isn’t an exact science; however, our Responsible Investment Policy is used to set out our Responsible Investment principles, and establish how our Investment Management Team should incorporate these principles into its investment decisions.
You can read our Responsible Investment Policy in full here.
Our Responsible Investment Policy sets out the grounds we use to identify those companies we wish to specifically exclude from investment portfolios. They fall into one of the following three categories:
Companies involved in the following areas are excluded for both direct and indirect investment:
Companies which fall into this category exhibit highly unethical behaviour, particularly in the context of:
These companies are excluded from directly held investments only.
We also use the New Zealand Superannuation Fund exclusions list to help us to identify companies involved in the areas of tobacco and controversial weapons, and to identify additional ESG exclusions.
The following industries are considered areas of sensitivity, due to their high likelihood of victimising people and/or the environment:
Investments may be made in in companies from these industries in special cases, where the general ethical concerns in question have been sufficiently mitigated by the company.