Investing in an imperfect world: Our take on true responsible investment

Since 2016, responsible investing has been in sharp focus due to heightened public awareness on whether KiwiSaver accounts are invested responsibly.

KiwiSaver is by far the most popular investment vehicle in terms of total numbers of New Zealanders invested, with more than 2.7 million members and total funds under management at more than $40 billion.

The heightened awareness led to an unprecedented shift towards funds being more responsibly invested, both directly and indirectly – the latter an important consideration given KiwiSaver scheme providers’ use of low-cost global index trackers.

While the actual changes in underlying investments in New Zealand are small, it nevertheless reflects a strong desire by New Zealanders to see a correlation between their personal values and where their money is being invested.

This paper seeks to contribute to redefining what responsible investment really means in the New Zealand marketplace. It draws from international best practice and offers our assessment on how best to apply those lessons to the New Zealand investment management industry.

Key findings

Responsible investment has gained a strong foothold in New Zealand but it is still in its infancy. The focus on exclusions is working against investors.
The benefits of responsible investing do not come from company exclusions; rather they come from integrating Environmental, Social and Governance (ESG) principles into investment decisions and engaging with companies on key issues.
Excluding companies is not an effective way to influence better behaviour – owning shares and voting gives investors a voice and is more likely to work.
A balance needs to be struck in incorporating ESG principles into investment portfolios – either too much or too little could represent a breach of fiduciary duty.
Partnering with the client is paramount. They must be engaged, educated and informed participants throughout the responsible investment process.

Download this whitepaper to get more detailed insights and observations about our take on responsible investment in New Zealand.

Investing in an imperfect world

Our take on true responsible investment

Since 2016, responsible investing has been in sharp focus due to heightened public awareness on whether KiwiSaver accounts are invested responsibly.

Key findings

Find out more by downloading the whitepaper

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