Choosing an ethical investment is a great way to have an impact on climate change. Mindful Money, a New Zealand charity that promotes ethical investment, reports that $1.18 billion of KiwiSaver money and $1.19 of other NZ retail investment funds are invested in companies that are involved in fossil fuel extraction and production.
With around 3.2 million New Zealanders signed up to KiwiSaver1, where we put our money has the potential to do good for both people and the planet.
What is ethical investment?
Put simply, ethical investment (or responsible investment) is an approach to investing money that focuses on both financial returns and avoiding harm, whether that's fossil fuels, pollution, animal cruelty, or weapons.
Consumers are more conscious than ever of the impact of their choices — and that includes our finances and investments. The Responsible Investment Benchmark Report 20212 shows that the market for responsible investments in New Zealand grew by 28% in 2020, to $142 billion.
Check your fund
A good place to start is checking where your KiwiSaver or investment funds are invested right now. Once you know what fund you're in, you can ask your bank or fund provider how they approach responsible investment and whether they have an ethical investment fund.
If you want to save time, Mindful Money has a free fund checker that can tell you what's in your KiwiSaver or investment fund. The charity independently analyses each of the funds, and also offers badges to show you which funds are free of animal testing, weapons, or fossil fuels.
Climate change is the main factor for me when looking for a fund, so avoiding fossil fuels, deforestation, and other environmental issues is top of mind
Consider your options
When it comes to investments, we all have choices. With the focus on climate change and other environmental issues accelerating, many consumers are choosing to invest in companies and investment funds with higher ethical standards.
If you're looking for an ethical investment fund, it's a good idea to compare your options. One option is to use Mindful Money's fund finder tool to help you compare different funds, based on the issues that matter most to you.
You can also talk to your bank or financial advisor to discuss your options and what might work best for you.
This article is for information purposes only and isn't intended to be financial advice. If you're looking at investing, you should speak with a financial adviser.