KiwiSaver’s budget is moving away from investing in destructive products, moral investing charity Mindful Money revealed last week.
It’s a good position to check the type of investments your own KiwiSaver provider is involved in, says private finance expert Mary Holm.
‘”They’ve done the dirty work and had a look at all the different shares they’re invested in so I really recommend people having a look,” she tells Jesse Mulligan.
The most significant update came through Mindful Money, the alleviation of investments through KiwiSaver’s services in tobacco companies, Holm says. In six months, investment in tobacco companies has fallen by 72%.
There has also been a 24-35% relief in their investments in guns, gambling, products that cause animal suffering and alcohol, and more modest discounts on investments in pornography and adult entertainment.
On the other hand, $7. 9 billion of KiwiSaver’s budget is still invested in corporations involved in fossil fuel and weapons production, animal cruelty, and human rights abuses.
Impact investing, in which providers align themselves with corporations concerned about “good things” like renewable energy and social housing, is just one form of moral investing, Holm says.
Another approach taken by some investment funds is to deliberately support companies that “do environmentally dodgy stuff” so they can go along to their annual meetings and have some influence.
While some people worried about whether making a moral investment yields lower returns, others will rightly wonder if there’s a way to “do good by doing good,” Holm says.
In general, it’s yes.
In recent years, he says, the moral budget has worked just as well, or even better, than the “actions of sin” that invest money in alcohol, tobacco, gambling, sex-related industries, weapons manufacturers, nuclear power plants, and landmines.
“There is one argument that says you should invest in both because the broader your diversification, the better your investment strategy is, but I think we can conclude that you can be in ethical investments and you’re not really sacrificing return and possibly you’re doing better than average.”
As “good with general investment information,” Mary Holm recommends Investopedia.
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