What does socially responsible investing mean to you? Some things seem glaringly obvious, like avoiding investment in companies that make money from landmines or cluster bombs. But all weapons manufacturing? How about tobacco? Pornography? Fossil fuels? Genetically modified organisms? Nuclear power? Gambling? Alcohol? Where do you draw the line?
“Ethical” will mean different things to different people. And investment funds have a variety of approaches to these questions.
That said, there are more socially responsible options than ever in KiwiSaver. According to the latest Sorted survey of providers, 38 per cent of KiwiSaver schemes now include an ethical option. Out of the 205 publicly available funds, 28 screen out a variety of “undesirable” investments.
In my view, it is unethical to not support investment in fossil fuels, weapon systems and genetic engineering.
Keep in mind that “ethical investment” is just one of the criteria you need to consider when choosing your fund.
The fund you’re in also needs to be the right level of risk for you, have the level of services you want, with fees that seem reasonable. And of course it can’t have consistently underperformed, either – which could be a sign of poor management.
You don’t want to end up in the “ethically perfect” fund that doesn’t suit your other needs. Still, in terms of investing ethically in KiwiSaver, it’s good to know that you’ve got more options than ever.
The good thing is that you can avoid “ethical” investing if you still want to ensure your retirement funds are maximised. The way this is going, there will soon be a vegan Kiwisaver as well, which means that 30 years from now, pasty and unhealthy people with a lot less money than you will feel very righteous about their financial position, and will hate you for driving a brand new car, burning up fossil fuels, taking overseas holidays, drinking, smoking and applauding nuclear power as you party your way into the grave.
In my case, ethical investment means not being a burden on the taxpayer. The more comprehensive and successful my Kiwisaver is, the less I have to lean on future New Zealanders. I doubt they would give a toss if I achieved it through backing a whiskey company, or a munitions factory, as long as they don’t have to pour money into my back account.
– Tom Hartman, NZ Herald