Mindful Money's Companies of Concern Methodology

Mindful Money enables investors to know if a fund invests in a ‘Company of Concern’.  Investors can then decide what action to take e.g. finding a fund with no or fewer companies of concern, or selecting a fund provider who engages with companies to lift standards.

What does "Company of concern" mean?

"Companies of concern" covers companies whose activities cause serious harm to people or the planet.

There are two overall types of concern:

1.Sector related issues: grouping of companies with business revenues (above a threshold) in a sector that investors are concerned about due to inherent harm e.g. making tobacco products or producing oil & gas. This is binary i.e. a company either meets the criteria or it does not.

2. Conduct related issues: selection of individual companies whose business decisions and actions cause material harm to people or the planet.  Harm is on a continuum, so deciding whether to include companies requires some judgement.  We review the available evidence to assess the scale of impact and pattern across time (i.e. are there systemic failings).

Note: If a company is not on the list it does not mean there are no issues.  It might have sector activity below the threshold. Or it might have some less serious conduct issues and management has responded effectively to avoid re-occurrence. In reality, the majority of companies have some mix of negative and positive aspects to their operations.

How do we know what activities Kiwis are concerned about? 

Every year Mindful Money and Responsible Investment Association of Australasia (RIAA) does an annual survey of the New Zealand public to identify the top areas of concern. From this we have created overall categories that are important concerns to at least 50% of the respondents. These are:

• Animal cruelty
• Fossil fuels
• Social harm
• Weapons
• Human rights (HR) violations
• Environmental harm

How do we define and set criteria for issues of concern?

We use recognised responsible investment category frameworks e.g. from RIAA, MSCI, Morningstar Sustainalytics and leading global responsible funds.

Harms to people or the planet often lead to financial impact, e.g. fines, court claims, loss of sales (reputation) or clean-up costs. Some fund providers focus more on financial impact (actual or potential), while taking into account non-financial impact (e.g. workers had life changing injuries). Mindful Money’s focus is the opposite. We focus mainly on the impact of the harm, but we also take financial impact into account.

Category definitions and criteria relate to the two types of Companies of concern:

1.Sector related: definitions relate to nature of the activity and part of a value chain e.g. key components for a product, producing the good or service, transporting products, retailing of products.

2.Conduct & controversy: definitions often relate to international laws (or norms) e.g. UN Guiding Principles for Business, UN Environmental Programme and International Labour Organisation (ILO).

Mindful Money has a committee, including two expert trustees, who review and approve changes to policies and proposed additions of new sectors or major companies due to conduct failings. This process supports quality and consistency.

Note, our definitions may differ from fund providers' investment policies. It is possible a company of concern is permitted under a specific provider’s policy. So you should also review the provider’s responsible investment policy (from their website). 

For some types of harm we also use tags for two reasons:

1. Harm is caused by multiple categories; e.g. Ocean Harm has underlying harm from fossil fuels (accelerating climate change and ocean warming) and also direct environmental harm e.g. major oil spills, over-fishing.
2. To provide further information. For instance, within the Fossil Fuels category, we identify whether companies are actively expanding extraction or are phasing out use of Fossil Fuels by switching to clean energy. 

Please look at the methodologies for each category to get more specific information.

Setting materiality thresholds for each sector category

We set ‘materiality’ thresholds equal to a % of revenue. The threshold relates to the degree of concern from kiwi investors.  As an example, many kiwis want to avoid alcohol producers, but are comfortable to invest in supermarkets earning a small amount of revenue from alcohol sales. The table below explains the sector categories and thresholds:

Emerging topics

We regularly review whether there are areas where harm is growing and levels of public concern are increasing. For instance, many people are deeply concerned about the degradation of our global ocean systems. In 2025 we produced a campaign and report to show how sectors and companies harm our Oceans.

Selecting companies to include in categories

1. For sector related issues, our primary source is the Morningstar Sustainalytics database. We can create queries across the 20,000+ companies to identify the companies that meet our sector criteria and exceed materiality thresholds. We also use some databases provided by reputable international organisations.

2. For conduct related issues, we use multiple sources including NGOs, leading responsible asset owners, reputable media and research providers.  A key resource is also the Morning Sustainalytics ‘Controversies’ tools, which analyses incidents when a company has breached globally accepted standards. Although judgement is needed for this type, we try to create consistency by considering:

• Severity of impact e.g. loss of life, severe and lasting effects of pollution.

• If there is a pattern and frequency of events - indicating poor standards or culture e.g. regular accidents, repeated chemical leaks, worker protests.

• Whether the company has violated international law.

• How the company has responded; statements from company leaders need to result in actions and a culture where everybody tries to do the right thing supported by effective operational processes.

• For more detail, refer to the pages covering methodologies for Human Rights & Environmental Harm. 

We can remove a company from our list if they stop the activity e.g.selling tobacco, or we have evidence that they have responded effectively to issues.

Through these processes since 2018, Mindful Money has created an inhouse database of nearly 3,000 Companies of Concern.

Process to Identify companies under each fund for the website:

Step 1: Analysis of holdings in each fund (also called a portfolio)

Fund providers have to publish holdings in each fund every six months to the Ministry of Business, Innovation and Employment (MBIE) in the Disclose Register. Mindful Money then matches these holdings to our companies of concern.

Many funds also invest in other funds, so we have to analyse these 'inside funds' to create a complete list of all individual investments within the portfolio.

Step 2: Updating the website

Mindful Money then publishes a Fund Detail Page for each individual fund. These pages are updated twice a year (in July and December).

The fund detail pages show the percentage of fund value in each issue of concern, the individual companies and the share of the fund’s value held in each company.  Note investments in companies below 0.01% are not listed on the website (but are included in category totals).  

This information is presented for free to the public on Mindful Money’s website. The purpose is to enable all retail investors to understand where their funds are invested, and particularly, how those investments relate to the issues the public is concerned about.