Expansion Of Aotearoa New Zealand Stewardship Code To Include Investment Service Providers

The Aotearoa New Zealand Stewardship Code is expanding to include investment service providers, a move aimed at further strengthening New Zealand’s stewardship activity and increasing alignment with international stewardship codes.

The Code was developed by investment industry representatives and has seen rapid adoption across New Zealand following the 2022 launch. The majority of New Zealand’s assets under management have already signed up, including domestic and international signatories such as Westpac NZ’s investment arm BT Funds Management NZ, Harbour Asset Management, the NZ Super Fund and Northern Trust. Globally, signatories to the Code manage over $2.8 trillion in assets globally.

Code Director Jackson Rowland says investment service providers can include financial advisors, investment consultants, proxy advisors, and data and research providers.

“These service providers are a crucial part of the investment ecosystem, and key to delivering stewardship outcomes. They support asset managers and owners to achieve their stewardship goals - whether that’s developing stewardship policies, undertaking research, engaging with companies, or preparing reporting.”

BT Funds Management NZ recently produced its second Sustainable Investment Report which includes a summary of its stewardship activities. Service providers were again crucial to the preparation of the report. Head of Investment Solutions Philip Houghton-Brown notes “when the Code was drafted it was always intended for it to extend to service providers in the future, so it’s great to see this happening. They’re a key part of our investment work, and being signatories to the same Code should increase consistency and improve outcomes across the market.”

Following consultation last year about expansion of the Code, two investment service providers have already signed up, Rowland says.

Philip Foo, Vice President of Asia-Pacific Research and Engagement at Glass Lewis, stated “Glass Lewis has a longstanding track record of supporting investment stewardship across Asia-Pacific. Our engagements with New Zealand’s public companies and investors—backed by our decades of experience in proxy voting and governance research—plays a vital role in advancing investors’ stewardship objectives. By becoming a signatory to the Aotearoa New Zealand Stewardship Code, we reaffirm our commitment to responsible investment practices and remain focused on providing New Zealand investors with the insights and solutions to strengthen their stewardship impact.”

Ethical Investing NZ, an award-winning ethical financial advisor, say they signed up because they want to show their commitment to a high standard of responsible investing, acting as a key link between fund managers and their clients. Mark Holtom, Director, Financial Planner explains “we’re in a privileged position of being able to work with fund managers, sharing client insights and thoughts around ethical investing, part of which is the stewardship of their wealth for future generations.”

Ethical Investing NZ regularly meet with portfolio managers to help ensure the engagement with companies around their environmental, social and economic value is both relevant and effective.

Rowland says in a world where sentiment around sustainability can be fragile, stewardship remains a leading strategy - even in the United States - because ultimately it’s about investors using their influence to maximise the long-term value of investments. In doing so, it enables efficient management of capital, builds trust between investors, companies and other key stakeholders, and demonstrates that clients’ and beneficiaries’ interests are at the core of the business model.

Signatories to the Code participate in regular events and forums to share and learn stewardship best practice, stay informed of key industry activity and collaborative engagement opportunities, and demonstrate their intent to be an industry leader, Rowland says.

“Stewardship includes monitoring and engaging with issuers and holding them to account on material issues, including through voting, and then publicly reporting on the outcomes of these activities. It also includes collaboration and advocacy to maximise the long-term value of investments.”

For more information visit https://stewardshipcode.nz/

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