Finance Minister Grant Robertson asks Super Fund to 'ethically invest' its $55 billion

Minister of Finance Hon Grant Robertson MP at Mood of the Boardroom. 28 September 2020 New Zealand Herald photograph by Michael Craig

Minister of Finance Grant Robertson has written to chairs of the Super Fund and ACC, asking them to adopt ethical investment policies to help "lift New Zealand's reputational standing".

He made the comments in letters addressed to the chairpersons of ACC, the Super Fund, the National Provident Fund and the Government's superannuation fund – known as the Crown Financial Institutions (CFIs).

These entities all invest public money – NZ Superfund's balance sheet is almost $55 billion; ACC's is closer to $44b.

In the December 22 letters, Robertson said it was the Government's expectation that these funds continue to focus on the "appropriate balance of risks and returns", when it comes to its investment.

But he also made very clear the Government's expectations around climate change.

"Ultimately, my expectation is that Government funds are leaders in New Zealand's achievement of our shared target of being carbon-zero by 2050.

"I expect CFIs to disclose climate-related financial risks and opportunities in… your annual reports."

This was something that Climate Change Minister James Shaw last week announced would now be a requirement.

Robertson never explicitly told the chairs where they should be investing – as that would be a breach of the rules – but his "expectation" was clear.

He said that the funds' role in the investment community could help "lift New Zealand's reputational standing as a responsible investor in the international community"..

"To achieve this, it is my expectation that CFIs maintain robust ethical investment policies which are reviewed regularly and reflect best practice standards both here in New Zealand and internationally."

Mindful Money founder, and former Green MP, Barry Coats welcomed Robertson's comments and said the Government has a "crucial role to play" when it comes to ethical investing.

Although the letter was sent in December, both ACC and the Superfund had been moving towards a tighter focus on "ethical investment".

For the Super Fund, the law mandates it must:
• Exercise best-practice portfolio management
• Maximise returns without undue risk to the Fund as a whole
• Avoid prejudice to New Zealand's reputation as a responsible member of the world community

But it already has a responsible investment framework, which promotes ethical investment.

ACC's chairwoman Paula Rebstock recently told MPs at a select committee that the fund aims its investment in a way that is ethical.

"For example, following a change in the law in April, ACC banned any investment in companies involved in the manufacture or selling of automatic or semi-automatic firearms."