Most investors don't know this says Barry Coates, chief executive of the ethical investment charity Mindful Money.

He says $9.3m of Kiwisaver funds are invested in Boeing, the largest supplier of weapons to Israel - including missile guidance systems, bombs and aircraft.

Mindful Money research also found $9.6m of Kiwisaver funds has been invested in Rolls-Royce Holdings whose German subsidiary makes engines for Israeli battle tanks.

Kiwisaver has invested $8.1m in Honeywell too. Those funds will help make components for missiles and drones.

Ethical investments sought

Mindful Money's annual surveys show that most people have ethical concerns about where their money is put to use. They don't want it invested in weapons.

Of the three million people enrolled in Kiwisaver, he says most weren't told where their money was invested.

"Where your money is invested has consequences ‒ for people, for workers, for the environment, for climate change."

Most investors want to avoid human rights violations, animal cruelty, fossil fuels, social harm from tobacco, alcohol and gambling, as well as weapons.

Demand for more ethical options had driven a huge change in investing over the last five years, Coates says.

This has seen Kiwisaver and investment fund managers advertise their investment policies. Today they are likely to say their investments are ethical, sustainable or using ESG [environmental, social and governance] policies.

"But the objective test is where they invest our money. Investing in weapons companies that profiteer from unjust wars is deeply offensive to most Kiwis" Coates says.

The Mindful Money website has resources - including a fund checker and a fund finder tool - available to help people review their Kiwisaver fund and be matched with a new one if necessary.

Source

• Stuff

Analysis by ethical investment charity Mindful Money, showed investment in harmful products fell by about $800 million in the six months ended September 2023, to $7.9 billion.

Mindful Money said it was the biggest fall since the charity started to track ethical investment five years ago.

It said until recently, the shift towards ethical investment had come from small and medium-sized funds, including Pathfinder, Medical Assurance Society, Simplicity and Always Ethical.

But in the latest recorded period, major players had significantly cut back on harmful investment. Read more

Data from Inland Revenue shows that there was $21.5 million withdrawn from KiwiSaver accounts for reasons of financial hardship in October, up from $10.3m in October 2022.

That is compared to an increase from $77.7m to $104.7m million over the same period for first home withdrawals. Read more

Coates is CEO of Mindful Money.

Analysis conducted by Mindful Money reveals that of the $98 billion of KiwiSaver investments, a substantial $8.6 billion (8.9%) is now allocated to unethical stocks.

This figure has increased from 7.2% in 2019, marking a concerning uptick.

Coates pointed out that while the recent surge in fossil fuel prices has prompted significant investments in this sector, passive investment strategies and the greater use of external index funds share the blame.

Many passive funds are channelling money into oil and gas companies that are expanding fossil fuel exploration and production.

Mindful Money has categorised fossil fuel companies into those transitioning to renewables, those expanding their fossil fuel operations and those taking no action. Investments in companies transitioning to renewable energy have remained stagnant as a percentage of KiwiSaver.

"One of the biggest investments in this area is Contact Energy, but for other companies on a renewable pathway, it is not significant.

"Meanwhile, investments in expanding companies like Exxon, Chevron, BP and Shell have more than doubled to reach $3.2 billion over the past eighteen months," says Coates.

Greater transparency needed

Despite claims that stewardship and shareholder voting can drive positive change, Coates argues that this approach often lacks credibility.

He acknowledges that increasing efforts in screening and engagement may result in higher fees.

The issue, however, isn't solely about active versus passive management.

Coates emphasises the importance of the type of passive investment, with some index providers offering stronger exclusions.

Beyond fossil fuels, KiwiSaver investments include

• $2 billion in companies that test products on animals for reasons other than human health,
• $1.4 billion in companies breaching human rights, and
• over $1 billion in companies causing social harm such as alcohol, pornography, gambling and tobacco.

It is now eight years since there was a public outcry over the amount of KiwiSaver funds in tobacco.

The latest data shows an annual growth of 50% in investments in tobacco companies such as Philip Morris, British American Tobacco and Imperial Brands, to more than $21 million.

Coates is calling for greater transparency within KiwiSaver schemes.

He is urging providers to disclose the full list of invested companies, especially those that might concern the public.

While other consumer product industries are aware of their customers' concerns, he says the investment sector appears to be an outlier.

A recent survey found that 74% of New Zealanders expect their money to be managed ethically and responsibly.

"The issue for financial advisers and fund managers is who's going to listen to the clients?

"There is evidence that clients don't always raise it proactively in meetings with their advisers but if and when it is raised they have very strong views.

"It's an age of climate change, and investment has a huge role to play, but somehow advisers and fund managers are carrying on as if there is no link," Coates suggests.

Sources

Good Returns

Interest

CathNews New Zealand

Early starters are KiwiSaver managers, some of whom have been selling millions of dollars in investments in Russian companies. Others, like the New Zealand Superannuation Fund, are reviewing their positions as Russia continues its attack on the Ukraine.

But Barry Coates (pictured), an ethical investment expert, says all New Zealand fund managers should sell their shares in Russian companies. Immediately.

He says it's especially important they sell shares in industries that fund much of Russia's military spending: major state-backed enterprises, government bonds, and oil and gas companies.

"The New Zealand public should be assured that their funds are not supporting the Russian state at a time of massive suffering for the people of Ukraine."

He says most New Zealand investments are in Russian oil and gas companies whose earnings play a major role in financing the Russian military. These should be sold.

"There are also investments in Russian government bonds. While sanctions are not required of New Zealand fund managers, an ethical position would be to divest immediately."

"Sanctions may not be required for KiwiSaver and investment funds that invest our savings, but those funds should divest anyway. It is not a responsible position for New Zealand funds to be investing in Russian companies or the Russian government. It is important that the New Zealand public's hard-earned savings are not used to support Russia's warmongering."

Coates, a former Green MP and current chief executive of Mindful Money, says there was about $100 million invested in Russia at the end of last September. The investments were spread across KiwiSaver, other investments, the NZ Superannuation Fund and ACC.

"While the value [of New Zealand's KiwiSaver] investment is not globally significant, many New Zealanders will be concerned that their funds are being used to support Russian companies at a time when civilians are being terrorised and killed by Russian aggression."

Russia bites back

Just now, pulling investments from Russia might not be a simple matter.

The Bank of Russia has banned brokers from selling securities held by foreigners on the Moscow Exchange.

In addition, the Moscow Exchange has been closed since the beginning of the week amid a full-blown financial crisis triggered by Western sanctions.

Source

• NZ Herald
• Image: Stuff

This is one of the findings revealed in the most recent annual surveys undertaken jointly by Mindful Money and the Responsible Investment Association of Australasia.

Mindful Money is a charity promoting ethical investing.

Its most recent report, Inside the Black Box of New Zealand Investment Funds was released last week.

The report shows the amount invested in each of the ten categories that the public wants to avoid and the trends over one year for the KiwiSaver fund and six months for retail investment funds.

The public has been clear in annual surveys that they do not want to invest in sectors like weapons, gambling and fossil fuels or in companies that violate human rights or test products on animals.

Barry Coates, founder and CEO of Mindful Money, commented: "There has been progress in responsible investing.

This reflects the international revolution towards investing responsibly and shows the benefits of transparency."

However, "...the major investment funds are still failing to reduce the harm from their investment," said Coates.

Despite the declines, there are still large amounts invested in Animal Welfare abuses ($2.2bn), Fossil Fuels ($1.6bn) and Human Rights violations ($1.2bn).

"It makes no sense that some funds are actually increasing their investment in fossil fuels when data shows that the US Oil and Gas index has dropped by 63% over the past five years," Coates said.

They are ignoring the facts and the frequent warnings of financial risks to fossil fuel companies.

126 KiwiSaver funds have investments in Exxon-Mobil, a company that has spent hundreds of millions on funding climate deniers."

Source

• Supplied Mindful Money
• Image: caresaver.co.nz

"We have strong opinions about where our money is invested. We especially don't like it to go to organisations manufacturing nuclear weapons."

Yet according to Brownsey, some New Zealanders are helping the nuclear weapons industry - although unwittingly on most people's part.

He says a new report from Nobel Peace Prize-winning International Campaign to Abolish Nuclear Weapons (ICAN) notes three Australian Banks (ANZ, Westpac and CBA - the owner of ASB) have loaned or invested over US$2.7 billion to companies involved in designing, manufacturing, testing and servicing nuclear weapons.

ANZ and Westpac are responsible for most of this lending, Brownsey says.

Between them they manage over 35 percent of the KiwiSaver market and their shares, as investments, are owned by a substantial number of KiwiSaver schemes.

Brownsey says ANZ and Westpac are prominent in ICAN's annual report showing which financial institutions have invested in the 18 companies most heavily involved in the nuclear weapons industry.

Both banks have provided significant capital (a total of more than US$1.3 billion each in investment in equity and debt) to companies integral to the production of nuclear weapons.

Brownsey says the companies include AECOM, Fluor Corp, General Dynamics, Honeywell International, Jacobs Engineering, Lockheed Martin, Northrop Grumman and the Serco Group.

Each has received millions of dollars to support their involvement in the construction of facilities or manufacture and maintenance of nuclear warheads.

"This pattern of investment is problematic for two reasons," says Brownsey.

"Firstly, in our view most KiwiSaver investors assume that their savings are not used to fund problem companies like the nuclear weapons industry.

"Yet any KiwiSaver scheme that owns either ANZ or Westpac shares is doing just that - supporting the nuclear weapons industry.

"Secondly, it shows the weakness of the banks' approach of applying different ethical standards to different parts of the business.

"ANZ has excluded companies that invest in firms involved in the testing or manufacture of nuclear weapons from its KiwiSaver scheme, while Westpac excludes only those involved in the manufacture of nuclear weapons.

"Yet both banks are content to lend money or invest in those same companies that they exclude from KiwiSaver."

Brownsey says financial institutions face a simple ethical choice: "You either choose to do bad stuff or you choose not to do bad stuff, and you explain both very clearly to investors. There is no in-between".

Source

• Good Returns
• Image: MSN.com

The launch took place at a Go Live event in Auckland.

Mindful Money, a free service, provides members of the public with a platform to check what is in their current KiwiSaver investments and to easily find funds that align with their values.

As a starting point it enables KiwiSaver account holders to find out where their funds are invested.

The platform also allows users to find funds that align with their values and to easily switch to a more responsible fund.

It is also a source of information and discussion on responsible investment.

Currently, only 1% of KiwiSaver funds have policies to avoid sectors like gambling, pornography and alcohol.

And only 2% avoid investing in exploration and production of fossil fuels.

"Mindful Money is here to help the public with a simple choice - do you want to invest responsibly and use your money to avoid harm and do good?" says Barry Coates, founder of Mindful Money.

Coates has a long history working for environmental groups. He's been the executive director of the World Development Movement, the executive director of Oxfam New Zealand and was a Green Party MP from 2016 to 2017.

When people hear about [changing to an ethical fund], most people want to do it.

"A survey that we did last year with RIAA and Colmar Brunton showed that Kiwis really want to be able to invest ethically, but they don't know how to do it," Coates says.

The survey suggested that around 71% of people expected their funds to be invested ethically, and 62% of those surveyed said they would be willing to change providers if the investment didn't align with their values.

Source

• Supplied: Mindful Money
• thespinoff.co.nz
• Image: headspace.com