A new KiwiSaver scheme aligned with ethical investing promises to only invest in New Zealand listed companies that have at least one female director on their boards.
CareSaver, which was launched today, comes as funds are getting keener to be seen investing ethically or responsibly.
The CareSaver scheme has been established by Pathfinder Asset Management (Pathfinder), a specialist ethical investment manager.
John Berry, Pathfinder's chief executive, said the new scheme wasn't tokenism, and all listed company directors must be appointed on merit.
"Boards must choose the most qualified for a governance role… [but] companies that do not have female directors do not meet our bottom-line diversity criteria.
"We believe boards without diversity of perspectives are more likely to have blind spots when assessing key long-term business risks."
Berry said Pathfinder will consider companies without a female director provided they demonstrate a commitment to address the absence of women at the boardroom table.
"New Zealand is an outlier compared to the UK, US and Australia, and we'd like boards to explain why," Berry said.
According to advocacy group Global Women in February this year, 18 per cent of NZX-listed companies (27 companies) had no women on their board.
New Zealand's 18 per cent is an outlier compared to the US (2.6%), Australia (4.4%) and countries such as UK, France, Finland and Italy where every listed company has at least one female board member.
Of New Zealand's top 50 listed companies, Argosy Property, Pushpay Holdings and Vital Healthcare Property Trust have no women on their board.
By contrast Auckland Airport, Genesis Energy, Tourism Holdings and Westpac lead the way with four.
According to research by the Responsible Investment Association Australasia (RIAA), the amount of money managed on a professional basis which takes environmental, social and governance (ESG) factors into account rose 3 per cent to $188 billion in 2018.
It now makes up 72 per cent of the total $261.4 billion in assets professionally managed in New Zealand which includes KiwiSaver, ACC and the New Zealand Superannuation Fund and is now the highest percentage globally for a developed financial market.
"These concerns are common to all KiwiSaver investors. Younger investors want a sustainable lifestyle while older KiwiSaver investors question the world they're leaving future generations," Berry said.
"We need to provide new and innovative investment options that offer investors in KiwiSaver the opportunity to both do well and do good."
However, there remains a mismatch between what managers are excluding and what is important to consumers.
Screening out sin stocks remains the most common form of responsible investment but there is growth in managers using positive screening, sustainability-themed investing and impact and community investment.
But RIAA found that while negative screening is still growing it has yet to catch up to what consumers want to avoid investing in.
Controversial weapons and tobacco were the most common investments screened out of funds but people searching the RIAA's responsible investment tool were mainly looking for funds which screened out fossil fuels and human rights violations.
Pathfinder has also committed to share 20 per cent of its investment management fees from its funds with 17 leading charities including the Mental Health Foundation, Forest & Bird and Plunket.
Individual KiwiSaver members will be able to select the beneficiary charity.