04 December, 2017
New survey shows KiwiSavers back Responsible Investment
Almost half of KiwiSavers want to know more about where their funds are invested and two out of five prefer to have their money in companies making a positive difference, according to new research by Westpac NZ.
The findings come as the bank puts in place a new Responsible Investment Strategy that integrates environmental, social and governance (ESG) factors into the decision-making process and removes investments in controversial weapons* and tobacco from its KiwiSaver funds.
The changes, which also exclude whaling, have been implemented by Westpac NZ’s investment fund manager BT Funds Management NZ (BTNZ) and apply to all Westpac NZ KiwiSaver and managed funds.
A survey of more than 1000 KiwiSaver members in October found that 44 per cent of respondents wanted to know more about where their KiwiSaver funds were invested.
Sixteen per cent did not want to know more, while 40 per cent did not care.
Westpac NZ’s General Manager of Consumer Banking and Wealth, Simon Power, says attitudes to investment are changing.
“Investors are increasingly looking at the social effects of their investment and weighing that against the expected financial return on their investment.”
Mr Power says both the bank and its investment arm are committed to a responsible investment approach.
“We are integrating ESG factors into our investment decision making process. We recognise ESG risks can present longer-term financial risks that we need to consider on behalf of our customers”.
“As part of this process, we have reduced investment in companies with a poor track record of managing these risks and through our partnerships with institutional fund managers engaged with the boards and management of some of the companies we invest in to bring about positive change. We will continue to take that approach in the future.”
In addition to the exclusions and integrating ESG factors into the investment decision-making process, BTNZ is also preparing to become a signatory to the UN Principles of Responsible Investing.
The survey of KiwiSaver members also found 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.
As part of the ongoing changes at Westpac, BTNZ has also measured the carbon intensity of its global equities portfolio.
“Our analysis shows the carbon footprint of the portfolio to be less than the globally recognised benchmark MSCI World index, and we expect, with an ESG approach, our footprint will reduce over time,” says Mr Power.
As well as making changes through its funds investment arm, Westpac NZ is committed to helping New Zealand tackle climate change more broadly.
“We believe driving faster development and uptake of clean technologies through our banking services is the most effective way we can help accelerate the transition to a low carbon economy,” Mr Power says.
“We are the only New Zealand bank to publish our exposure to the CleanTech and fossil fuel sectors. We are also the only NZ bank that has a transparent strategy to increase our lending to climate change solutions, like renewable energy, green buildings and forestry.
“We are also watching the progress of the International Taskforce on Climate-Related Financial Disclosures and are supportive of standardised disclosures by companies which will make it easier for investors to make better informed financial decisions,” Mr Power says.
In September, Westpac Group was ranked the world’s most sustainable bank in the Dow Jones Sustainability Index for a fourth year in a row and the 10th time overall.
*Nuclear explosive devices, anti-personnel mines, cluster munitions.
Nexus Planning & Research was commissioned by Westpac NZ to conduct the research. It surveyed 1007 KiwiSaver investors in October 2017. The margin of error is +/- 3.1%.