by Rob Hosking
The fund is legally required to not invest in ways which would prejudice New Zealand’s international reputation.
In its recent annual report, Costello says one of the fund’s priorities for the coming year is to review both the ethical investing responsibilities and also how the fund exercises its voting rights.
“This is an area of growing awareness in both the pension fund and general communities.”
Costello says the fund has been talking with a number of international pension funds but has found most focus on the issues around ethical or socially responsible investing in their own backyard and do not have an international approach.
One of the difficulties is in coming up with a consistent approach to the issue, says Costello, and there is a greater imperative for the NZSF to come up with one because it is prudent for it to invest so large a proportion of its fund offshore.
The NZSF is looking for someone who will “champion these issues –both in terms of socially responsibly investing and also the appropriate exercise of our voting rights,” Costello says. “We have our obligation under the legislation, and it is also good pension fund management to be consistent about these things,” says Costello.
“We expect to take an approach based on engagement [with companies being invested in] rather than divestment,” he says.
The other big issue is simply getting accurate information about companies, he says.
“A lot of information out there can be quite selective and you can get the wrong picture about a company.”
Rob Hosking is a Wellington-based freelance writer specialising in political, economic and IT related issues.
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