Investing in a way that incorporates environmental, social and governance (ESG) issues, manages risk and generates attractive long-term returns is an important part of our investment decision making process.
ESG stands for ‘Environmental, Social and Governance’. ESG Investing is a strategy that considers both financial returns and the social and environmental impacts of investments.
ESG considerations include environmental and sustainability measures such as climate impact, energy efficiency and waste management. Social factors include human rights, fair trade and employee work/life balance. And good governance includes mitigating risks like bribery and corruption.
We look closely at the companies we’re considering investing in, to see how they stack up against these measures. We believe that companies who proactively manage ESG issues are not only doing the right thing, but are more future-focussed and will ultimately deliver better returns for our members.
Mindful Money is an independent New Zealand charity that tracks and compares KiwiSaver and investment providers based on their ethical standards. Generate’s funds have been recognised officially as ‘Mindful Funds’ by Mindful Money, and have some of the lowest levels of investment in ‘issues of concern’, which include things like animal testing, weapons and palm oil.
As of 20 April 2022, our Conservative Fund has 0% investments ‘of concern’, the Generate Growth Fund scores 1.77% and the Generate Focused Growth Fund has 2.51%.
As part of our responsible investment process we specifically exclude companies involved in the manufacture of whale meat, cluster munitions, nuclear explosive devices or tobacco, and we undertake screening procedures to limit our exposure to other areas of concern.
We also promote impact investing and work actively with partners for a more sustainable future.
Generate were the first KiwiSaver Scheme to make an impact investment into social housing with a $15 million investment in Salvation Army community bonds, which helped build 118 warm houses for families in need. And in 2021 we were part of a group that won “Best Collaboration” at the Sustainable Business Awards, for our part in the ‘Aotearoa Pledge’ – an initiative to raise and invest $100 million into affordable housing in New Zealand.
Since then, our impact investments have helped finance over 150 homes for Kiwis who need them, while providing reliable investment returns for our KiwiSaver members.
We’re also a major shareholder in Skyline Healthcare Group (SHG), New Zealand’s market leader in aeromedical transport. They provide essential healthcare services to every District Health Board in New Zealand, with scheduled and emergency patient transfers. We’re proud our impact investment helps support kiwis when they need it most.
And we’ve also chosen to work with Live Ocean to protect and restore our significant ocean spaces. The ocean and the life in it faces multiple stressors and Live Ocean supports and invests in promising marine science, innovation and marine conservation projects.
To see a copy of our Responsible Investment Policy click here.
^Mindful Money scores as at 18 March 2022. Responsible Investment - Mindful Money