Invest for Climate Action
How To Find a Fossil Fuel Free Fund
The transition to zero emissions will require a massive shift from fossil fuels to clean energy. Investors can avoid fossil fuel companies and instead choose to invest in fossil free KiwiSaver and investment funds.
Every investor has the power to reduce their climate impacts through their investments.
Your impact is surprisingly large.
When most people consider their carbon footprint, they think about their electricity use, or travel by car, or the food they eat. These impacts are important and add up to around 7.7 tonnes of carbon dioxide equivalent for each New Zealander.
We can all take action to reduce our emissions by using electricity from renewable sources, cycling or taking public transport, reducing our consumption and waste, and going vegan. But what about the impact of your savings and investments?
Few people think about the climate footprint of their KiwiSaver fund or their other investments. Yet they are important. Your KiwiSaver invests mainly in companies, and they have very different impacts on the climate. We now have measures of the greenhouse gas emissions from most of the public companies (those listed on a share market) and so we can add up the emissions in our funds. For example, an average KiwiSaver fund invested in global shares has a footprint of around 2.3 tonnes of CO2 equivalent. That’s larger than most other elements of an individual’s carbon footprint.
The different ways that a KiwiSaver or investment fund manager can reduce the emissions in their portfolio:
Divestment and portfolio construction
Free your funds from fossil fuels
Mindful Money's calculations show that $2.781 billion of KiwiSaver money and $3.18 billion of other NZ retail investment funds is invested in companies that are involved in fossil fuel extraction and production (analysis of September 2022 data). If you don’t want your money to be part of it, switch to one of the funds listed below and join the global divestment movement.
Climate change stems from a serious economic failure to live within our ecological boundaries, and economic solutions are needed to regain a stable climate. Finance is central to those changes. Money fuels the economy, so the challenge is to direct the flows of funds to businesses that will reduce emissions and invest in adapting to a far more volatile climate.
It’s not only a sound moral decision to help stop greenhouse gas emissions to avoid climate catastrophe, but a sound financial decision – up to 80% of fossil fuel reserves are at risk from becoming stranded assets, with little value as fossil fuels are phased out. Authoritative research
shows that divestment from fossil fuels in recent decades has not resulted in lower returns and we have recently shown the evidence of a huge financial loss experienced by investors in the coal, oil and gas sectors.
Going fossil free is good for your returns and good for the future of our planet. And it's easy!
The following is a list of those funds that have a policy to avoid investing in fossil fuel producers, and have fully excluded them from their portfolio (Mindful Money measures the level of investment down to 0.01% of the portfolio).
Funds that can show they have no investment in fossil fuels can now use our new fossil fuel free badge. Look for the badge above to be certain of who is putting their money where their mouth is.
- Mindful Funds are the ones with
Funds with Fossil Fuel Free Badges
KiwiSaver Funds with Fossil Free policy and portfolio
- ASB Positive Impact Fund
- Booster Socially Responsible Investment High Growth Fund
- Booster Socially Responsible Geared Growth Fund
Switch to one of the funds listed above or use the Fund Finder to find a KiwiSaver fund that matches your criteria.
Investment Funds with Fossil Free policy and portfolio
- Fisher Funds Australian Growth Fund
- Fisher Funds International Growth Fund
- Salt Sustainable Global Shares Fund
- Lighthouse Global Equity Fund
- Hyperion Global Growth Companies Pie Fund
- Stewart Investors Worldwide Leaders Sustainability Fund
Invest in one of the funds listed above or use the Fund Finder to find an investment fund that matches your criteria.
The Global Divestment Campaign
The global divestment campaign has seen institutions (such as Auckland and Dunedin Councils; Otago, Victoria and Auckland Universities; the Anglican Church), countries (like Ireland) and investment funds go “fossil free”. As at end 2021, $40 trillion of investment funds had been divested worldwide. The campaign is not only de-legitimising the fossil fuel industry, it is speeding up the phase out of coal and oil and gas. You can join the NZ campaign for institutions to divest through our partner organisation, 350 Aotearoa.
For more background, visit the our blogs Myths about Divestment, Who caused Climate Change and Financing Zero.
Want to know more?
Check out the following seminars we have held on supporting the climate: