24 October 2024

On International Day of Climate Action 2024, New Zealand charity Mindful Money is calling on Kiwis to drive climate action with their investments. Most of us want to do our bit to help avoid climate chaos. A crucial - and easy - step that Kiwis can take is to reduce the emissions that result from their KiwiSaver and other investments.

Mindful Money is highlighting three actions that Kiwis can take to reduce the emissions financed by their investments.

Climate action 1: Avoid funding the fossil fools

Everyone with a KiwiSaver fund has the power to ensure their money doesn’t fuel climate change. There is over a billion dollars of KiwiSaver funds invested in hard core climate polluters that are still increasing their emissions, instead of transitioning to renewable energy.

Mindful Money Co-CEO Barry Coates explained: “This year’s Climate Action Day comes at a time when floods, fires, lethal heat and cyclones are devastating the lives of millions of vulnerable people, and wreaking havoc on our oceans, glaciers, forests and species. Kiwis can reduce their own contribution by choosing not to invest in the companies causing the most damage.”

The highest emissions are from the major coal, oil and gas companies that have made billions of dollars in profits while denying the problem and delaying and obstructing climate policy. A mere 57 oil, gas, coal and cement producers are directly linked to 80% of the world’s global fossil CO2 emissions since the 2015 Paris climate agreement.

The public companies, Shell, ExxonMobil, Chevron, BP and TotalEnergies were the five largest emitters between 2016 and 2022.

New Zealanders still invest large amounts in these fossil fools. Analysis by Mindful Money across all 376 KiwiSaver funds shows that $3.75 billion was invested in fossil fuel companies at end March 2024. More than a third of that was invested in the companies that are still expanding their production, instead of transitioning to renewable energy.

Investors in fossil fuel expanders are also taking financial risks from future declines in demand for fossil fuels and stranded assets - the reserves and production infrastructure that will become worthless as renewable energy replaces fossil fuels.

Barry Coates commented: “Surveys show that 71% of Kiwis want to avoid fossil fuels companies in their investment funds. But most KiwiSaver funds invest in fossil fuels, including those the companies that are still expanding their production. Everyone with a KiwiSaver or some kind of investment can play their part in cutting off investment into the worst climate polluters.”

ACTION (estimated 15 minutes): Members of the public can go to Mindful Money’s website to find out if their KiwiSaver fund is invested in these companies. It’s quick, easy and free to check your fund, and then find a fund that is better for the climate.

https://mindfulmoney.nz/kiwisaver/checker/

Climate action 2: Don’t fall for the greenwashing

Over half of Kiwis surveyed are concerned about greenwashing - misleading claims that companies or funds are ‘climate friendly’ or ‘green’ or ‘sustainable’. There has been growing international pressure on companies and funds that make empty promises in order to boost their profits, but little action in New Zealand.

The EU, UK and other governments are introducing rules on green claims by companies and funds to prevent greenwashing, and regulators are taking action. The Australian Securities and Investment Commission (ASIC) has taken 47 regulatory actions against greenwashing over the past 15 months. There have been three court cases including a fine of $14 million for global fund manager, Vanguard. New Zealand’s Financial Markets Authority (FMA) has repeatedly warned they will take action against misleading claims but has yet to take action. Meanwhile KiwiSaver and investment funds are still claiming green credentials while investing in the fossil fools.

Barry Coates commented: “It is not surprising the New Zealand public is concerned about greenwashing. Most funds in New Zealand claim to use some form of Environmental, Social and Governance (ESG) management in their investment. But these ESG claims are not consistent with investment portfolios that contain companies destroying the world’s climate and facing huge financial risks.”

“The New Zealand government is still failing to tackle greenwashing by the providers of KiwiSaver and other funds whose claims are not backed up by their actual investments. Investors need to take action themselves to ensure that their investments are not adding fuel to the climate fire.”

Without government action in New Zealand, the responsibility for avoiding greenwash falls on individual investors. It is now easy for members of the public to get free information about the reality of where their money goes. Mindful Money’s website not only shows the fossil fuel investments for all KiwiSaver and investment funds, but identifies those that are still expanding their production.

ACTION: Those with KiwiSaver and investment funds should call on their fund providers to provide evidence of their ESG or sustainability claims, including specifics about the companies they invest in. Information provided by the fund providers can be checked out with the investment listing on Mindful Money. www.mindfulmoney.nz/kiwisaver/checker/

Climate Action 3: Add your voice for change

International cooperation in the form of a Fossil Fuel Treaty is needed to stop the major fossil fuel companies from blocking progress towards investment in renewable energy. International treaties have been developed to phase out other forms of harmful products, including landmines and nuclear weapons. The Fossil Fuel Non-Proliferation Treaty is being proposed to manage a global transition to a safe and affordable energy future for all. It has been endorsed by 14 governments (not including New Zealand) and thousands of leaders from across civil society and local government, including Wellington City Council and Kāpiti Coast District Council.

ACTION: Members of the public are encouraged to work with organisations, networks, faiths, academic institutions and Councils to support the treaty, and to sign the treaty themselves. https://fossilfueltreaty.org/

Barry Coates concluded: “The Treaty is important to focus government attention on the fossil fuel industry. For the third year in a row, the next climate summit in December 2024 will be held in a country producing oil and gas (Azerbaijan). Fossil fuel lobbyists will again be given privileged access. The Fossil Fuel Treaty is a way to bring the issues of fossil fuel phaseout into the climate negotiations.”

Notes:

1. International Climate Day of Action is on Thursday 24th October. It is a time for citizens around the world to consider the actions they can take to help avoid the worsening climate crisis.

2. Mindful Money’s Fund Checker enables members of the public to check the investments in their KiwiSaver and investment funds. It is quick, easy and free. https://mindfulmoney.nz/kiwisaver/checker/

The research report ‘In Transition or in denial’ explains the categorisation of fossil fuel companies into those transitioning to renewable energy and those still expanding their oil and gas production.

https://mindfulmoney.nz/learn/fossil-fuel-investment-in-transition-or-in-denial/

The Mindful Money Fund Finder helps members of the public to find a fund that aligns with their values. https://mindfulmoney.nz/kiwisaver/finder/

The website provides a list of funds that do not invest in fossil fuel companies https://mindfulmoney.nz/invest-climate-action/fossil-free-funds/

3. Research on capital expenditure by the major coal, oil and gas companies is published by the international research institute, InfluenceMap.

https://carbonmajors.org/briefing/The-Carbon-Majors-Database-26913

4. This week, a greenwashing action has been launched against the world’s largest fund manager, BlackRock. The complaint to the French financial regulator shows the US investment giant’s so-called “sustainable” funds have poured over a billion dollars into fossil fuel expanders, including ExxonMobil, Shell, TotalEnergies, Chevron and BP. BlackRock is one of the world’s largest fossil fuel investors, holding investments of US$430 billion (NZ$714 billion) in 543 fossil fuel companies. BlackRock provides services to three of the largest KiwiSaver providers - ANZ, ASB and AMP. https://www.clientearth.org/latest/press-office/press/clientearth-complaint-targets-blackrock-over-misleading-sustainability-claims/

5. International research shows the large passive funds that are claiming to invest sustainably are still investing in the oil and gas companies that are expanding their production. 70% of the 430 ‘sustainable’ passive funds analysed by international researcher Reclaim Finance were exposed to companies expanding their fossil fuels. These included big oil and gas developers (e.g. ExxonMobil, TotalEnergies, Shell) and big coal developers (e.g. Adani, Mitsubishi, Glencore).

https://reclaimfinance.org/site/wp-content/uploads/2024/03/15032024-Report-Unmas king-greenwashing-a-call-to-clean-up-passive-funds.pdf

6. Greenwash can take different forms. Some funds claim to be green by investing in the fossil fuel companies and then influencing them towards sustainability. But the latest progress report from the umbrella engagement forum, Climate Action 100+, shows continued empty promises and little action. Only one of 37 major oil and gas companies subject to engagement is making adequate progress towards net zero. Seven years after Climate Action 100+ was formed, most of the coal, oil and gas companies are still expanding their oil and gas production instead of transitioning to renewable energy.

https://www.climateaction100.org/wp-content/uploads/2024/10/14th-October-Final-Su mmary-Report-Slides-For-legal-review-7th-October-V3-2.pdf

7. The only New Zealand case on greenwashing has been a civil case. Consumer NZ, the Environmental Law Initiative (ELI) and Lawyers for Climate Action New Zealand Inc (LCANZI) are seeking declarations from the High Court that Z Energy has breached the Fair Trading Act by misleading New Zealanders with its public messaging that it is “getting out of the petrol business” and it is “well on track to achieving [its] carbon reduction targets” when in fact its emissions have been increasing. https://www.eli.org.nz/z-energy-greenwashing

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