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NZ investors will move their money if funds prove non-ethical

New research commissioned by Mindful Money and RIAA shows that 58% of New Zealanders would consider switching their investments to another provider if their current fund was inconsistent with their values.

Thursday, October 29th 2020, 6:30AM 2 Comments

As New Zealand prepares to release its sustainable finance roadmap, new research shows that more than three-quarters (78%) of New Zealanders with KiwiSaver or other investments believe that ethical or responsible investments perform better in the long term.

The new study, conducted by Dynata for Mindful Money and the Responsible Investment Association Australasia (RIAA), highlights the significant consumer demand for responsible and ethical investment, as the industry continues to grow in its size and influence.

RIAA CEO Simon O’Connor told Good Returns that he was not surprised by the findings. “We have seen now for a number of years that [for the] vast majority of New Zealanders their investments and savings are aligned with their values. What has fundamentally changed is that we now see that the vast majority of New Zealanders, almost 80%, now also believe that responsible investment performs better in the long term.”

“It is really encouraging to see that the myth that ethical and responsible investments underperform is rapidly being put to bed.”

The research is part of a wider sea change in New Zealand’s investing culture. “What we have here is an opportunity to align financial capability and wellbeing through the use of responsible investment.” O’Connor says referring to the two-thirds of New Zealanders who would be more motivated to save and invest more money if they knew their savings and investments made a positive difference in the world.

O’Connor says that this momentum shift also needs to be taken up by advisers. “This doesn’t mean that we need to go out and immediately divest from every industry that this survey says that Kiwis care strongly about. It’s really important that fund managers, KiwiSaver providers and financial advisers are being really clear with their clients with how they plan to manage these risks and alleviate any harm that comes from their investments.”

“Tools such as Mindful Money and Responsible Returns make it much easier for advisers to be able to have a conversation with their clients, to engage their clients, and to provide solutions for their clients that match their values.”

O’Connor believes that the trend seen in this survey is only going to get stronger. “In New Zealand we have a vast majority of the financial service sector with responsible investment measures in place. We see about half of those with a leading approach. We think there is room to continue to strengthen that.”

“This has become more than just about avoiding harm. This is now about using financial services to influence change and support sustainable businesses. Positive impact is where New Zealand investors really start to get excited.”

Tags: ESG Mindful Money responsible investing RIAA

« Northern Trust wins bid for ANZ’s passive investment suiteAMP a laggard with KiwiSaver default status on the line »

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Comments from our readers

On 29 October 2020 at 4:41 pm John Milner said:
Not one for being cynical, ok I am but I would love to see how they come up with some of these sweeping statements;

“We have seen now for a number of years that [for the] vast majority of New Zealanders their investments and savings are aligned with their values." What does that actually mean as I don't believe the majority of funds are invested within SRI products to allow this.

“It is really encouraging to see that the myth that ethical and responsible investments underperform is rapidly being put to bed.” This was not a myth. Early products had high fees that impacted returns.

"58% of New Zealanders would consider switching their investments to another provider if their current fund was inconsistent with their values." I'm amazed they only managed to twist 58% with that question. But is it reality?

It's no wonder I only made it to morning tea at a day-long RIAA seminar a few years ago.

Just a guess but has the RIAA employed Donald Trump's speech writer?
On 2 November 2020 at 7:40 am Pragmatic said:
An example of propaganda promulgated by those with vested interests.

Whilst I remain neutral about the outlook for ESG, I am disturbed to read these sorts of declarations (largely unfounded, or supported by an aligned minority), that run alongside distorted 'greenwashing' campaigns.

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