Inside The Black Box: What's In Your KiwiSaver Or Investment Fund?

Mindful Money is today releasing its report, Inside the Black Box of New Zealand Investment Funds analysing the portfolios of all KiwiSaver and retail investment funds. There are now more ethical funds available to the public and less of their investment is being invested in companies they would like to avoid.

However, the report also shows that most of the investment industry is still failing to take the impacts of their investments into account. A total of $6.4 billion of the public’s money is still being invested in companies the public wants to avoid.

Mindful Money’s report analyses where all 280 KiwiSaver funds and 390 retail investment funds invest their money. This is a unique perspective on the sectors and companies that receive investment from the public.

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. The report finds that more funds now avoid these sectors or avoid the worst companies.

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.”

“Mindful Money enables the public to see what is really in their funds for the first time. This shines light into the black box. Fund managers are now reducing their holdings of those companies that cause harm. What gets reported gets managed.”

However, the report shows that there is still $4.1 billion of KiwiSaver funds invested in companies that the public wants to avoid, and $2.3 billion of retail investment funds.

Barry Coates explained: “The major investment funds are still failing to reduce the harm from their investment. For example, 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. 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.”

“Fund managers who rely on discredited financial theories are wasting investors’ funds and holding back the transition to clean energy and a low carbon future.”

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 KiwiSaver fund and six months for retail investment funds. 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).

Barry Coates commented: “Public demand and pressure for change is crucial in order to clean up the investment sector. Mindful Money is unique in providing information to the public on which companies they invest in. This is a free service that is quick and easy for members of the public to use.”

This report shows progress towards a greater accountability for investment. It also shows New Zealand is in the first wave of a revolution in investment that will focus on the impacts of investment on people and the environment.

“Investors have the opportunity to invest ethically. It is quick, easy and free to do so. Each investor has the chance to use their investment to contribute towards improved wellbeing, sustainability and a safe climate.”

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