By Joe Taylor, founder and CEO at BetterSaver
As a general rule, Kiwis seem to be getting more into voting with our dollars. We’re doing our best to support local small businesses, ditching single-use coffee cups in favour of reusable ones and generally trying to put our dollars where our ethics are.
So wanting to invest in companies that align to our values seems like a natural progression.
Globally, the rise of sustainability-focussed investments has risen 15 percent in the past two years. A 2020 survey by the charity Mindful Money and the Responsible Investment Association of Australasia (RIAA) found that most Kiwis in “non-ethical” funds had an appetite to switch.
So it may surprise you to learn that there’s a very real possibility that your KiwiSaver provider is investing in industries that they actively claim they have low or no exposure to.
Don’t worry, I’m not going to preach about what you should be doing with your money, I’m just highlighting the need for all of us to take control of where we invest.
But Joe, how can providers say one thing but do something else?
It’s not that all providers who have exposure to industries you deem unethical are actively misleading you (although, I’d argue that some definitely are full of BS). It’s more that what one person deems an absolute deal-breaker may seem perfectly ethical to another. For example, your fund may brand itself as ethical because it avoids nuclear power and weapons, but animal testing is an absolute no-go for you.
Plus, many providers indirectly invest in companies that work in controversial industries. For example, your provider may invest in a company that invests in a company that builds weapons of war. Since they don’t directly invest, they don’t have to declare that they do.
So, what can you do?
Since the term ethical means different things to different people, you should find a fund that aligns with your values. Researching this yourself can be a pretty time-consuming process and one fraught with murkiness, since providers often use a lot of financial jargon and are generally pretty unclear about where your dollars are going.
That’s one of the reasons I built BetterSaver; to empower Kiwis to find the KiwiSaver fund that is right for them.
We work closely with providers to get visibility of their exposure to loads of controversial industries, from animal testing, to civilian weapons and weapons of war, to tobacco and alcohol, among others.
Our fund finder quiz analyses the best fund based on your ethical preferences, as well as your savings goals.
It’s free and it only takes a couple of minutes.