KiwiSaver Series with Matthew D’Souza: Good News for Ethical Investors

KiwiSaver expert, Matthew D’Souza, answers all of your KiwiSaver questions and provides some insightful commentary on one of our most talked about financial initiatives.

There have been some encouraging trends in the KiwiSaver arena lately, particularly in how investment strategies are evolving to prioritise ethical considerations. This marks quite a shift in how funds are being managed, reflecting more of a move towards responsible investing.

According to ethical investment charity Mindful Money, KiwiSaver providers have significantly reduced their holdings in companies involved in tobacco, weapons, gambling, and animal testing. This translates to about $800 million less invested in these areas in the six months leading up to September 2023—that's the biggest drop they've seen since they started tracking ethical investments five years ago!

This trend is particularly encouraging because it's being driven by major players in the KiwiSaver market. ASB, AMP, and ANZ have all cut back on harmful investments, with some reductions exceeding 30%. This is a great step forward, as it means less KiwiSaver money is indirectly supporting activities that many New Zealanders find concerning.

However, there's still room for improvement. Mindful Money highlights that a significant amount ($7.9 billion to be exact) remains invested in companies that are considered unethical. A major concern is the continued investment in fossil fuels, which reached a record high of $3.29 billion.

Beyond the ethical considerations, fossil fuels might also be a financial risk. The International Energy Agency predicts demand for fossil fuels will decline sharply after 2028, which could lead to major losses for companies still heavily invested in exploration and production.

So, what does this mean for you?

If you're a KiwiSaver investor who cares about ethical and sustainable investing, this news is a positive development. However, it's still important to understand your own KiwiSaver scheme's investment approach.

Here at Union Plus, we can help you review your KiwiSaver plan and ensure it aligns with your values and risk tolerance. We can also explore options for investing in specific ethical or sustainable funds.

Get in touch with me today for a free review and let's build a KiwiSaver strategy that reflects your financial goals and ethical priorities.

About the Author

Having lived on three continents and in six cities, Matthew D’Souza is a citizen of the world! And it is that very background that helps him relate to clients from all walks of life. After catching the advisory bug young, Matthew left a successful career in performance marketing to guide his clients through the financial maze of life. With a special focus on KiwiSaver and financial planning, his aim is to delight every client with the retirement that they dream of. Seeing his clients' success is what drives him and gets him leaping out of bed in the mornings!