NZ Funds, which manages the NZ Funds KiwiSaver Scheme, says KiwiSaver investors should not skimp on socially responsible investment, in the pursuit of lower-fee funds. The fund manager said it had a clear approach to ensure it thoroughly investigated all of its portfolio holdings.
It works with Institutional Shareholder Services, which screens for landmines, cluster munitions and nuclear weapons but also looks at human rights, labour standards, environmental protection and anti-corruption considerations.
Over the past two years NZ Funds has sold holdings in BHP Billiton for failing to remediate the damage caused by a burst dam and in Phillips 66 for not respecting indigenous rights, as a result of ISS information.
Its in-house investment team also screens each new investment for ESG factors.
If a concern is identified NZ Funds will engage with the company’s management to work out what remedial steps were being taken. If it was not satisfied with the response it would take a public stance or sell the investment as a last resort.
“There are many reasons not to consider a broader range of corporate behaviour but NZ Funds suspect cost is the main one. The old adage you get what you pay for is as applicable to KiwiSaver as it is to any other service.”
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