The New Zealand Superannuation Fund has rebutted claims by the Green Party that its ethical investment policies are inadequate.
Anne-Maree O’Connor, New Super Fund head of responsible investment, said the Green Party attack was “a storm in a teacup” and based on a flawed understanding of how most institutions invest. Last week the New Zealand Green Party released a report comparing the New Zealand Super Fund unfavourably with the Norway Pension Fund, one of the world’s largest investment funds. Russel Norman, Green Party co-leader and economics’ spokesperson, said its report, titled ‘Betting the bank on the bomb’, revealed that the New Zealand Super Fund had invested a total of NZ$64 million in 12 companies the Norwegian fund had blacklisted, including some that manufacture nuclear weapons and cluster bombs. “When we criticise the ethical investment choices of the NZ Super Fund, we are told they do it to make a good return. But the much larger Norway Pension Fund can make a high return on their investments while excluding nuclear bomb manufacturers, so why is the management of the NZ Super Fund unable to do the same?” Norman said in a statement. However, O’Connor said the Norway Pension Fund’s stock divestment rules are governed by legislation and is separate from its investment strategy while the New Zealand Super Fund takes an “engagement approach” on socially responsible issues. “We believe that as a small fund, divestment is not as effective at dealing with socially responsible investment as an engagement approach,” O’Connor said. “Our mandate is to avoid prejudicing New Zealand’s reputation as a responsible country.” Despite this she said the New Zealand Super Fund has recently divested four companies from its portfolio that were engaged in producing landmines. “We’ve also divested one company that was involved in processing whale meat… I don’t know if the Norwegian fund has done the same thing,” O’Connor said. According to the Green Party report the Norway Pension Fund has returned an average 4.5 per cent each year since its inception in 1997. Since its launch in 2003 the New Zealand Super Fund has achieved an annual return of 14.99 per cent.
Since taking over the top job at the $44 billion Funds SA more than a year ago, chief executive John Piteo has ushered in an investment function overhaul and wrapped up an important stage of the fund’s five-year data transformation program. It pledges to recentre around investment performance and more efficient processes, as the “missing piece” has been found in incoming CIO Con Michalakis.
Darcy SongJanuary 10, 2025
