Ethical investing: KiwiSaver funds linked to accused human rights violators – The Front Page

More than half a billion dollars of New Zealanders’ KiwiSaver and other retail investments have been lent to countries on ‘high alert’ for human rights violations, according to a new paper from Motu Research.

Lead researcher Anne-Marie Brook told The Front Page this research is about helping people get more insight into what their money is supporting when they invest.

“Not everyone may be aware that in their KiwiSaver accounts, there’s a mix of investments across different types of assets.

“It includes both shares and companies, and then also investments in government bonds. And it’s that government bond part that we are focused on.

“Government bonds are essentially loans to the governments that have issued those bonds. So the question is, which governments do New Zealanders want to be lending to?” she said.

Brook said that currently, there is no system for evaluating whether these investments are linked to governments with bad human rights performance.

“There are some responsible investment certifications that focus mainly on investments in companies.

“You often hear, for example, research about how much money in KiwiSaver is being invested in weapons manufacturers and things like that.

“We use data from the Human Rights Measurement Initiative (HRMI), which is a global NGO that consistently tracks human rights across countries.

“HRMI looks at a range of rights and includes things like killings and torture, freedom of speech, and rights to things like education and health.

“We defined the worst performers, or the ‘high alert’ countries, as the ones that are in the bottom 10% of the world across those rights, plus any that have been reliably accused of genocide.

“Based on that definition, there were four worst-performing countries that Kiwis are currently investing in, and they are China, Israel, Qatar, and Saudi Arabia,” she said.

In New Zealand, researchers found that bank funds manage two-thirds of all KiwiSaver and retail investments, and 75% of the investments in the worst-performing countries are coming from these funds.

The paper examined investments as of March 2024, and Brook said some things have changed since then.

“When we’re talking about bank funds, we included BNZ funds at that date. But, since then, BNZ has sold those assets to Harbour Asset Management. So, we would get slightly different results now.

“The main point of this research was not to provide up-to-date detail on individual Kiwisaver funds, it was more to point out the fact that there is no system that allows individual people to get that up-to-date information,” she said.

Listen to the full episode to hear more about:

• Bank funds vs non-bank funds.
• Recommendations and next steps.
• Public awareness and regulation.

The Front Page is a daily news podcast from the New Zealand Herald, available to listen to every weekday from 5am. The podcast is presented by Chelsea Daniels, an Auckland-based journalist with a background in world news and crime/justice reporting who joined NZME in 2016.

You can follow the podcast at iHeartRadio, Apple Podcasts, Spotify or wherever you get your podcasts.