Westpac NZ’s investment arm, BT Funds Management NZ (BTNZ), has signed the United Nations-supported Principles for Responsible Investment (PRI).
The six principles are an aspirational set of investment guidelines intended to offer a range of possible actions for incorporating Environmental, Social and Governance (ESG) issues into investment decision making practices.
More than 1750 organisations, from more than 50 countries, and representing more than $70 trillion in investments, have signed up to the principles.
Westpac NZ General Manager of Consumer Banking and Wealth, Simon Power, said the move is another sign of BTNZ’s commitment to making responsible investing a part of its investment approach.
“Westpac, through BTNZ, has publicly committed to adopting these principles to invest its customers’ savings in a more sustainable and responsible manner.
“Becoming a signatory to the PRI is a tangible step in our continued work in this area and underpins our pledge to all our investors to be responsible custodians of their funds.”
The reporting requirements are extensive, meaning BTNZ will be monitored against its commitments by an external body on a continuous basis.
The fund manager introduced a Responsible Investment Strategy in September 2017, which along with incorporating ESG issues into investment analysis and decision-making processes, removed investments in tobacco and controversial weapons, such as anti-personnel mines and cluster munitions., from its portfolio.
Whale meat processing was also excluded.
“It should be noted it’s not just about ruling industries out. It’s about recognising that many issues come in shades of grey rather than black and white,” Mr Power said.
“By integrating ESG factors, we can engage with boards and management to drive positive change in their organisations.”
Mr Power said a recent survey of more than 1000 KiwiSaver members (from different schemes) revealed 41 per cent of respondents preferred to have their money in a fund which invests in companies making a positive environmental or social contribution.
Fourteen per cent disagreed with that approach, while 45 per cent said they were not concerned.
“We believe the number of investors who prefer to have their money in responsible funds is higher than it would have been even two years ago.
“Investors are increasingly interested in the social effects of their investment and are weighing that against the expected financial return on their investment.”
Mr Power said there would be no impact on fund management fees as a result of BTNZ becoming a signatory to the principles.