Ethical Investing on the Rise in New Zealand, $100 Billion of KiwiSaver Funds Now Manage Ethical Approach

Strategic Insights -

New Zealand's investment landscape is undergoing a significant shift, with a growing number of Kiwis investing in ethical funds. According to a recent analysis from the charity Mindful Money, $100 billion of KiwiSaver funds are now managed with some form of ethical approach, up from 90% of investment being managed with a form of ethical investment policy estimated by the FMA. This trend is driven by increased awareness among consumers that their investments have consequences for the climate, environment, and social well-being. As a result, investment providers are adapting to meet this demand, understanding that it makes sense to reduce the financial risks associated with poor environmental, social, or governance practices. Ethical investing has become good practice, with many fund managers recognizing the benefits of prioritizing sustainability and social responsibility.

Key Takeaways:

  • Over $100 billion of KiwiSaver funds are now managed with some form of ethical approach, indicating a significant shift towards sustainable investing.
  • The FMA estimates that 90% of KiwiSaver investment is now managed with some form of ethical investment policy.
  • Increased consumer awareness and demand for ethical investment options are driving this shift, as Kiwis become more informed about the companies their funds are invested in.
  • Fund managers are adapting to meet this demand, recognizing the importance of prioritizing sustainability and social responsibility.
  • A significant decline is observed in unethical investment areas, including a 74% fall in tobacco products, 33% fall in alcohol, and 20% fall in gambling.
  • Despite progress, there is still $9.3 billion of KiwiSaver investment in harmful activities, highlighting the need for continued awareness and action from investors.
  • Mindful Money's tool for transparency has been used by over 400,000 New Zealanders, driving positive change and demonstrates the power of collective action.

Statistics:

  • 90% of KiwiSaver investment is now managed with some form of ethical investment policy (FMA estimate).
  • $100 billion of KiwiSaver funds are now managed with some form of ethical approach (Mindful Money analysis).
  • 74% fall in tobacco products investment.
  • 33% fall in alcohol investment.
  • 20% fall in gambling investment.
  • 69% fall in pornography and adult entertainment investment.
  • 31% fall in weapons investment.
  • 29% fall in animal cruelty investment.
  • 16% fall in environmental damage investment.
  • $9.3 billion of KiwiSaver investment in harmful activities.
  • 400,000 New Zealanders have used Mindful Money's tool for transparency.

Sources:

  • Mindful Money, analysis of KiwiSaver funds and managed investments.
  • FMA, estimate of 90% of KiwiSaver investment being managed with a form of ethical investment policy (Liam Mason's speech to the RIAA NZ Conference on 19th September 2024).
  • Mindful Money, 2023/2024 impact report.
  • Norwegian Sovereign Fund, NZ Super Fund, Sustainalytics, and research organizations, ratings and public sources.