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Our approach to responsible investing

We're committed to responsible investing. Environmental, social and governance (ESG) issues are considered by our in-house investment management team when making decisions about investments.

By analysing the ESG profile of companies we invest in, we aim to enhance the expected performance of our portfolios by avoiding those companies with high ESG-related risks, and investing more in companies with limited amounts of ESG risk.

Responsible investing

We’re part of the United Nations Principles for Responsible Investment framework.

In 2020 Kiwi Invest became a signatory to the United Nations-backed Principles for Responsible Investment framework. Find out why that’s important and what that means.

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How we apply our Responsible Investing Policy

Our New Zealand-based global investment management team has control over which industries and companies our funds are invested in.  Decisions about what is or isn't invested in is in our control, guided by our Responsible Investment Policy

We do our research

We subscribe to MSCI ESG Research who provide us with in-depth research, ratings and analysis of the impact on the environment, social issues (like work conditions for employees) and governance-related business practices of thousands of companies worldwide. Their research provides us with critical insights that help us identify ESG risks and opportunities that traditional investment research may overlook.

Influencing positive change where we invest

Using the collective power of our investors we can use proxy voting to influence positive change on ESG issues in organisations we invest in. Through world class research provided by ISS we identify opportunities and, where relevant vote for change as a Socially Responsible Investor. Longer term, these votes make good business sense.

Our exclusions

Exclusions fall into one of the following three categories:

See our exclusions

1. Zero tolerance exclusions

Companies which are involved in any of the following product areas will be excluded for both direct and indirect investment:

Tobacco – the tobacco industry’s products are both highly addictive and highly detrimental to health. In addition, their products are aggressively marketed in emerging economies, amounting to widespread human victimisation. We exclude companies where tobacco is the primary industry.

Controversial and nuclear weapons – controversial and nuclear weapons are characterised by being particularly likely to cause civilian casualties either due to their intended usage or due to unintended casualties. This category covers weapons such as cluster bombs, landmines, depleted uranium weapons, chemical and biological weapons, nuclear weapons. We exclude any company identified as being involved in this category.

Whaling and whale meat processing – the whaling industry has decimated many whale populations. The New Zealand government is strongly committed to anti-whaling efforts and whaling remains a deeply unpopular industry in New Zealand. We exclude any company identified as being involved in this category.

2. ESG exclusions

Companies which fall into this category exhibit highly unethical behaviour, particularly in the context of:

  • Abuse of the environment
  • Human rights abuses
  • Endemic illegal activities, whether by New Zealand or local law.

These companies will be excluded from directly held investments only, including where such investments may be made by another investment manager under an IMA.

3. Areas of sensitivity

The following industries are considered areas of sensitivity, due to their high likelihood of victimising people and/or the environment:

  • Defence and firearms
  • Gambling services
  • Thermal coal
  • Nuclear power
  • Palm oil

Investments may be made in these sensitive areas in special cases where the general ethical concerns for the industry in question have been sufficiently mitigated by the company. Some of these may end up on our exclusion list.

We also use the New Zealand Superannuation Fund exclusions list to help us identify companies for our exclusion list.