Stocktake - spotlight on ESG

There is growing body of research showing that taking sustainability factors such as environmental, social and governance factors (ESG) into account when making investment decisions can lead to an improvement in investment performance. Many investors around the world are increasingly recognising the importance of ESG factors and are exploring ways to integrate such factors into their investment strategies.

Below, we take a look at several companies that have strong commitments to sustainable business practices and are leaders within their respective industries. You may hold shares in these companies through your investment in the funds managed by BT Funds Management (NZ) Limited, the investment arm of Westpac in New Zealand, including the Westpac KiwiSaver Scheme, Westpac Active Series and the Westpac Premium Investment Funds. 

 

Vector (NZ)

Vector is NZ’s largest distributor of electricity and gas, providing infrastructure that supports the energy needs of over 1.5 million New Zealanders’. One of the main challenges for Vector is meeting the needs of their current customers without impacting the ability of future generations to meet their energy needs. Vector recognised that they needed to be a leader in transforming the sector by identifying and developing options that will provide a more sustainable energy future.

As part of that goal, Vector has publically committed to achieving greenhouse gas emission reductions agreed to under the Paris Agreement and supporting the transition to a low carbon economy. The company has launched new products and is researching new technologies that aim to make energy supply more resilient and supportive of a more sustainable future. A recent example of such development is Vector Lights – 92,000 solar powered LEDs, with 248 solar panels providing energy for the Auckland Harbour Bridge alongside 475kWH in battery storage.

Tesla (US)

Energy companies are not the only ones committed to a more sustainable energy future. The automobile industry has also seen a shift towards a more sustainable product range, including the rise of electric vehicles. Unsurprisingly, Tesla is a company that comes to mind when conversation turns to electric vehicles. The company was founded in 2003 with the vision to supercharge the public's interest in the potential benefits of electric vehicles.

The company designs and manufactures high-performance electric cars and components. Tesla’s fuel-efficient, fully electric vehicles recharge their lithium-ion batteries from an outlet. To create an entire sustainable energy ecosystem, Tesla also manufactures a unique set of energy solutions, including its Powerwall and Solar Roof products, enabling homeowners and businesses to manage their renewable energy generation and storage needs. 

Air New Zealand (NZ)

Another industry that is facing sustainability challenges, in particular, the ones related to carbon-constrained future, is aviation. Air New Zealand operates flights to over 50 domestic and international destinations and is a great example of an airline stepping up to the challenge and taking active measures to operate in a more sustainable way. As part of its sustainability framework, Air New Zealand established a carbon reduction programme which enables its customers to offset the impact of the greenhouse emissions generated by using its products. Air New Zealand is also running other initiatives to promote a more sustainable business, among them being committed to a 100% electric vehicle ground fleet by the end of 2018 and having all of is ground service equipment electric by end of the company’s 2020 financial year.