The Times They Are A-Changin'

18 Sep 2016

In an article titled 'Rewarding Responsibility' in today's Sunday Star Times, Martin Hawes explains how about twenty years ago he started to take an interest in Socially Responsible Investment (SRI). The pioneers in promoting this idea 'especially Dr Rodger Spiller, who at times was almost a lone voice' are generously acknowledged by Martin.  Having studied and worked on responsible investment for over thirty years I have been happy to see developments in the past month in which, as Martin describes ‘suddenly and quite spectacularly, the zeitgeist has changed. Cluster bombs and tobacco are widely discussed and SRI has become important’.

The major catalyst for the recent upsurge in interest and most importantly changes in investment, has been a Radio NZ and NZ Herald investigation first published a month ago on August 18th and a related tool available at http://insights.nzherald.co.nz/article/kiwisaver-investments that offers the ability to 'Find out how much your KiwiSaver has invested in cluster bombs, landmines and tobacco'.

The research highlighted that ‘millions of New Zealanders have unwittingly invested in tobacco and controversial weapons’. The Herald reported that there were ‘pervasive holdings – totalling more than $100 million – by members of the public in companies considered so controversial the government-owned New Zealand Superannuation Fund has blacklisted them’.  For example, more than two million New Zealanders were ‘found to have collectively – and likely unwittingly - invested $102 million into tobacco companies’.

By the following day Radio NZ was reporting that ‘KiwiSaver members are switching providers and demanding answers from banks after learning their schemes were investing in companies making cluster bombs and anti-personnel mines’.  In the space of a week I was interviewed by Radio NZ, Newstalk ZB and RadioLive. One of my messages was that the research was indicative of an even bigger problem as most of the fund managers in question offer many of their other investments in a similar way to their KiwiSaver investments. So investors with substantial amounts invested in funds that are not explicitly offered as ‘socially responsible’ could expect that money to include investments that are blacklisted by the New Zealand Superannuation Fund.

Martin notes that in the past month ‘Reportedly, more than $100 million has already come of ethically questionable investments’. Money talks and as investors have voted with their money many fund managers appear to be having conversion experiences like Saul on the Road to Damascus. This is a very welcome and long overdue development. As Bob Dylan wrote back in 1964 -  ‘The Times They Are A-Changin' – a key question now is how many New Zealanders will change their investments and how far down the responsible investment road will they be willing to travel?

What we do with our money really does matter. As more New Zealanders awaken to the realities of their current investments and decide to invest more consciously in responsible investment funds  Money Matters looks forward to offering more advice through the investment minefield.  Despite many years of naysaying and excuses and outright derision from many in the mainstream investment community investing ethically is an idea whose time appears to have come.  

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