ASB bank is the last major KiwiSaver provider to continue holding investments in tobacco companies after AMP and Westpac confirmed they will pull out this year.
The bank, which is the country's second largest KiwiSaver fund manager, confirmed today it still has an exposure to tobacco companies which was worth more than $20 million last month.
"ASB funds' investment approach includes having a globally diversified portfolio of assets, and we provide full transparency of holdings on the public 'Disclose Register'.
"With our index-tracking style of investment management, we track the index and have benchmark exposure to tobacco.
"As at the end of February 2017, ASB's average exposure to tobacco across all KiwiSaver funds was 0.31 per cent."
Morningstar figures show ASB had $6.99 billion in funds under management as of February 28 putting its tobacco investment at $21.9m.
ASB, AMP and Westpac were left as the last three major providers still invested in tobacco after a number of other providers pulled out in the wake of research carried out by the New Zealand Herald and Radio New Zealand which exposed controversial investments.
AMP Capital recently announced it would pull out of tobacco investments worth A$440m ($480m) globally this year.
The company would not say how much of this money was invested by New Zealand KiwiSaver investors.
But last year the Herald identified AMP Capital's KiwiSaver funds had $17m invested in tobacco companies in the year to March 31, 2015.
A spokeswoman for Westpac confirmed on Monday that it, too, expects to exit its tobacco investments by the end of the year.
"BTNZ, as manager of the Westpac KiwiSaver Scheme, has a process under way to exclude any exposure to munitions and tobacco across all KiwiSaver Funds.
"This process is expected to be complete by the end of this year."
Westpac had $12.2m invested via KiwiSaver into tobacco as of March 31, 2016.
ASB said it was still looking at other options that focus on socially responsible investments.
"We are continuing to look at whether there is another way we can provide investors with an alternative, low-cost, index tracking investment option that focuses on socially responsible investments."
Boyd Broughton, programme manager for ASH NZ (Action on Smoking and Health New Zealand), said ASB's investments appeared to contradict its mission statement.
"ASB's website states that: ASB pledged to serve the community; to grow; and to help Kiwis grow.
"Investing in an industry that cuts short more than 5000 Kiwi community lives each year is contradictory to that pledge.
Broughton called for the bank to join other providers and send a united message that there was nothing "Kiwi" nor anything remotely "saving" about the tobacco industry.
"This is an industry which has historically and contemporarily challenged every public health policy developed to reduce harm and death from tobacco in New Zealand.
"ASH NZ look forward to congratulating ASB for withdrawing any KiwiSaver investment funds from tobacco."
Chris Douglas, director manager research ratings at Morningstar, said a lot of people probably assumed their KiwiSaver provider invested with a conscious attitude.
"I think when it comes to armaments it's easy to say people are not comfortable with that.
"Then you look at tobacco, alcohol and gambling and the question is, where do you draw the line?"
Douglas said it was tricky making policy decisions at the larger firms.
But in light of AMP and Westpac's moves he expected ASB to be looking closely at its own position.