KiwiSaver Investments Fuelling The Climate Crisis: New Research Reveals A Surge In Fossil Fuel Investments

New research reveals KiwiSaver funds have significantly increased their exposure to fossil fuel investments, despite mounting evidence of climate risks and a strong public preference for sustainable investments.

Key findings from the latest Mindful Money analysis show:

• KiwiSaver investments in fossil fuels jumped to $4.42 billion in September 2024, marking a substantial 18% increase from $3.75 billion in March 2024.
• Investment in the worst fossil fuel companies - those still expanding their fossil fuel production - increased by over 20% over the six month period
• This continued investment in coal, oil and gas companies stands in stark contrast to public sentiment, with 77% of New Zealanders saying they want to avoid fossil fuel investments.

Barry Coates commented: "These findings reveal an alarming disconnect between how New Zealanders want their savings invested and where their money is actually going. While some KiwiSaver providers have responsibly avoided fossil fuels, others continue to increase their exposure to climate-damaging investments. The increase of 18% in a six month period is of deep concern."

The worst fossil fuel companies are those that are still expanding their production, instead of transitioning to renewable energy. Most of the major oil and gas companies have promised for decades to make the transition but they are now doubling down on fossil fuels. In many cases, those companies are funding climate deniers and lobbying governments to remove regulations that promote renewable energy.

It is of deep concern that there has been a 20% increase over the past six months in the KiwiSaver fund investments in companies still expanding their production of oil and gas.

This is reckless at a time when millions of people around the world are suffering from climate-related bushfires, droughts and floods. Instead of lowering the temperature, the expanders are throwing more fuel on the fire.

This is also reckless financially as well as for the climate. Over the past decade, the value of oil and gas companies has fallen far behind the market average. And there are mounting financial risks in the future. When production starts to decline, the value of fossil fuel reserves and production infrastructure is likely to plummet, leaving ‘stranded assets’ that are almost worthless.

On Monday, Mindful Money will launch a public awareness campaign, featuring biting satire by actress Olivia Coleman, playing oil executive Oblivia Coalmine. Adverts in TVNZ+ and prominent Lumo billboards will aim to let Kiwis know that over $4 billion of their hard-earned savings are being pumped into investments in fossil fuel companies.

It is time that Kiwis stopped supporting the fossil fools with their hard-earned savings from KiwiSaver accounts.

The global divestment movement now represents over $70 trillion in assets. At this scale, it is creating strong incentives for companies to transition to renewable energy. This has been demonstrated locally, with Genesis Energy's recent decision to transition away from coal at Huntly power station at least partly influenced by their fossil fuel penalty - on a comparable basis, their share price is 20-30% lower than renewable-focused competitors.”

"The power of divestment is clear," Coates added. "When KiwiSaver holders align their investments with their values, it helps create real pressure for companies to transition to renewable energy.”

"New Zealanders have a choice with how they use their money," Coates concluded. "Most Kiwis already take individual actions to reduce their emissions, like driving less or reducing power use. They can also use their money to take action. They can switch their KiwiSaver fund to one that is free from fossil fuel companies, reducing the climate emissions financed by their investments.”

“Everyone with a KiwiSaver fund should check what companies are in their fund, and make an informed choice about where their money is invested. They can look in the Mindful Money website to find a climate friendly fund. Fossil free investing is smart investing.”

Notes:

The charity, Mindful Money analyses KiwiSaver and managed fund portfolios each six months, and publishes a list of companies that are of most concern to members of the public on the website www.mindfulmoney.nz. The information is free access. Everyone who has a KiwiSaver or investment fund should know where their money is invested.

Mindful Money has used analysis by international research institute, Urgewald, that categorises oil, gas and coal companies according to their capital expenditure plans. The category of expansion specifies the companies bringing significant volumes of new oil and gas into production.

The analysis shows that KiwiSaver providers have made large investments into companies that are still expanding their production, like Shell, BP, Woodside Petroleum, Santos and Exxon Mobil. The increase of 20% in companies expanding their production far exceeds the increase in KiwiSaver funds of 7%for the period.

Mindful Money provides a list of the KiwiSaver and investment funds that avoid fossil fuel producers off-track for a 1.5 degree transition pathway at https://mindfulmoney.nz/invest-climate-action/fossil-free-funds.

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