Ethical investing is the practice of aligning your investments based on your personal values. Investing ethically or responsibly can have various meanings, and different organisations have a variety of approaches when it comes to this. For example, Fisher Funds have a framework in place to exclude investments that they believe are unethical.
The company was launched in 1998 offering their first investment fund composed of New Zealand shares. Now, Fisher Funds has many actively managed KiwiSaver funds ranging from conservative to aggressive which invest only in companies they consider are acting responsibly.
Responsible investing policy
Fisher Funds is one of the companies we believe are investing responsibly and one which we recommend to some of our clients who want to prioritise ethical investing in their KiwiSaver. For this reason, we wanted to take a deeper look into what they are doing to implement their responsible investing policy during investment selection.
As a signatory of Principles for Responsible Investment, Fisher Funds takes into account the environment, social, and corporate governance (ESG) concerns within their investment selection process. ESG refers to these three main aspects which are used to measure the sustainability of an investment in a company.
As of October 2020, Fisher Funds have over 1,000 companies in their exclusion list. Their implementation process includes looking at goods and services the company produces to make sure they don’t cause widespread harm. Fisher Funds will not invest in companies:
that manufacture cigarettes, or that generate a significant proportion of their revenue from the manufacture of tobacco related products.
that produce core components or systems for weapons, which normal use would cause indiscriminate harm. This includes landmines, chemical, and nuclear weapons.
where a significant proportion of their core business includes the production of thermal coal, or where they are significant contributors to thermal coal production.
that have exhibited unacceptable corporate behaviour that Fisher Funds regards as a fundamental breakdown of the integrity of the business.
Fisher Funds’ exclusion process
Fisher Funds’ exclusion list is updated at least every quarter by their ESG committee and their existing funds are regularly reviewed against this list. When making any inclusion decisions, they consider demonstrable evidence of change in each of the companies governance, activities or behaviour to assess their suitability as an investment.
They evaluate the corporate conduct of the companies they are considering to invest in, or already invest in, to look at their behaviour from an ESG perspective. They undertake research on each individual company whereby the insights gained are incorporated into the decision making.
Fisher Funds partner with research agencies such as MSCI to identify companies with great records of sustainability and to exclude companies with poor records of sustainability. They have excluded companies with controversies regarding toxic emissions & waste, product safety & quality, bribery & fraud, human rights concerns, or any harmful impact on local communities.
Is your KiwiSaver fund investing ethically?
A KiwiSaver provider can simply say that they are investing ethically or responsibly, but that could mean differently to different people. We engage regularly with various providers and investment managers to thoroughly understand their investing policies and how they are put to use when selecting companies to invest in.
Choosing a KiwiSaver fund that invests ethically may be important for you, and we will take that into consideration in our investment selection process. In addition to ethical considerations, ensuring that the funds we recommend you are the most suitable for your situation and goals is important. To optimise your investments in KiwiSaver, you need to make sure that your KiwiSaver fund is right for you. Submit our KiwiSaver HealthCheck to find out more.