Responsible investing on the rise

  • 14/08/2015
Responsible investing on the rise

Fiona Rotherham

New Zealand responsible investment assets grew 10 percent last year mainly on the back of rising consumer interest in how their retirement savings are invested.

It now adds up to $3.6 billion although 86 percent of them are accounted for by the New Zealand Superannuation Fund and the Accident Compensation Corporation.

A new New Zealand report from the Responsible Investment Association Australasia, the first in 14 years as a standalone from Australia, found growing consumer confidence in responsible and ethical investments.

The finance sector was taking stronger positions on their management of environmental, social, and governance issues.

Some 2.5 million New Zealanders are now signed up to KiwiSaver and RIAA chief executive Simon O'Connor said more consumers were waking up to the fact they could invest their retirement savings profitably without compromising their values.

"There has been also been a surge in private wealth investors, charities in particular, that are demanding more alignment with their beliefs and their investments," he said.

The rise in the consumer demand is demonstrated in particular by the 19 percent growth in 2014 in New Zealand's core responsible investment funds - those referred to as ethical or socially responsible funds, to $3.2 billion assets under management.

Half of that came from a lift in average fund returns and the rest by new money coming in. These funds include religious organisations, community trusts, and a number of retail ethical funds including KiwiSaver accounts.

Retail demand under these core SRI funds now represent 4 percent of total assets under management in New Zealand, above 2.5 percent in Australia.