A return to values

22nd Oct. 2018

Investors are looking to align their investments with their values, writes Tom McKinlay in the Otago Daily Times.

by Tom McKinlay
published in Otago Daily Times, 22 October 2018

Investors are looking to align their investments with their values, writes Tom McKinlay.
"Money, so they say, is the root of all evil today".

That was Roger Water's take on the subject back in 1973, in the chart-topping Pink Floyd song. And if the received wisdom has softened somewhat in the intervening years, the question is still out there: can money do good?

Well, there is some encouraging news on that front. More money is being invested in such a way as to avoid abetting the worst of intentions, the likes of cluster bombs and cigarettes, according to research on trends in New Zealand.

That constitutes change. We need only remember that as recently as 2016 several default KiwiSaver schemes were, embarrassingly, found to be investing in companies in the business of both mines and cluster bombs.

It seems those revelations shook up the investment industry. According to the latest report from the Responsible Investment Association of New Zealand and Australia (RIAA) "a responsible approach to investing ... is now the expected minimum standard of good investment practice in New Zealand".

Numbers appear to bear that out.

As at December 31, 2017, responsible investment constituted $183.4billion of assets under management in New Zealand, up a significant 40% from $131.3billion in 2016, the RIAA reported last month.
Those KiwiSaver revelations caused a "massive shift" in the industry towards what is known as "negative screening", the report says, where particular areas of business are ruled out as investment options, such as controversial weapons, tobacco, gambling and prostitution.

The report both welcomes the trend but also highlights the fact there is still work to do.

In the same week those figures were released by the RIAA, a new New Zealand organisation was launched with the mission of guiding responsibly minded investors to the funds that mirror their values.

It is called Mindful Money and at its head is former Green MP and long-time sustainable development entrepreneur Barry Coates, who, among other things, wants to dispel the myth that you can't do good and get a good return, too.

Link: https://www.odt.co.nz/lifestyle/resilient/return-values