Not With My Money: Avoiding Investments In Russia

Two years have passed since the onset of the brutal invasion of Ukraine by Russia, a period marked by global upheaval and a collective reassessment of investment ethics worldwide. Mindful Money, New Zealand's leading ethical investment charity, today reflects on the substantial progress made by New Zealanders and their fund providers in divesting from Russian assets, aligning their investments with their values and international calls for justice.

Barry Coates, CEO of Mindful Money, observed, “The invasion has resulted in a huge toll on Ukraine’s soldiers and civilians with over 400,000 killed or injured so far. The trauma and devastation to people’s lives is incalculable. New Zealand investors should not be financing Russia’s aggression.”

In the immediate aftermath of the invasion, Mindful Money issued a call for New Zealanders and fund managers to divest from Russian companies that were linked to the state or pivotal in funding Russia's military activities.

Barry Coates, CEO of Mindful Money, stated, "The response from New Zealanders was immediate and profound. It underscored a universal truth – our collective voice holds immense power. By choosing to divest, individual and institutional investors not only took a stand against aggression but also safeguarded our investments from the repercussions of global sanctions against Russia. This collective action serves as a reminder of what we can achieve when we unite for a common cause."

The call for divestment was not just a moral stance but a protective measure for investors. As predicted, investments in Russian assets suffered steep declines in value, exacerbated by international sanctions and the global community's repudiation of Russia's actions. The KiwiSaver and investment funds that were slow to invest lost almost all of the value of their shares and bonds. Those who divested early avoided significant financial losses, underscoring the alignment between ethical decision-making and prudent financial management.

"It's been heartening to see the swift and decisive action taken by New Zealanders and their investment funds. While the initial value of New Zealand's investments in Russia was over $100 million, within days of Mindful Money publicising the holdings, we can proudly say that the majority of those funds were redirected," added Coates.

In light of our reflections on the invasion of Ukraine, it is also crucial to acknowledge there are other regions experiencing conflict and injustice. The international community has imposed sanctions on investment in Russia, but failures of UN governance mean sanctions are not always applied in other situations. Mindful Money has called for investors to divest from areas of gross violations of human rights, even if there are no sanctions applied by our government. This includes companies colluding with the Myanmar government and supporting illegal Israeli settlements in occupied Palestine.

However, recent analysis shows that New Zealand KiwiSaver and managed funds are still invested in companies supporting the illegal Israeli settlements in the Palestinian Occupied Territories, despite a UN Security Council resolution that was co-sponsored by the New Zealand government. As responsible members of the global community, we should ensure that New Zealanders’ investments do not support or perpetuate gross violations of human rights and international law.

Coates concluded, "Despite recent progress, there is still almost $7 billion of KiwiSaver funds invested in issues that most New Zealanders want to avoid, including $82 million in companies that are complicit in war and conflict. Our collective voice is more critical than ever. Individual New Zealanders should take responsibility for their money. They can find out what they are invested in on the Mindful Money website and engage with their fund provider over investments that they are concerned about, or find a fund that better aligns with their values.

“Everyone with a KiwiSaver or an investment fund now has access to the information that allows them to use their investments as a force for good, championing not only the rights of those affected by the invasion of Ukraine but also standing in solidarity with all communities facing injustice, such as those in illegal Israeli settlements. Together, we can make a difference."

Coates concluded, "Our actions today shape the world we live in tomorrow. We need to invest in a future that promotes peace, sustainability, and respect for human dignity. The decisions we make as investors send a powerful message about the world we want to create."

For more information on ethical investing and to see the list of KiwiSaver and investment funds that avoid unethical issues, please visit www.mindfulmoney.nz. The website is free, accessible and easy to use.

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