Westpac’s KiwiSaver and investment arm, BT Funds Management NZ (BTNZ), are committing $300m to sustainable shares. This is to align their KiwiSaver funds to support efforts of limiting global temperature rises.
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“We’re working to align our entire portfolio with our climate objective of a 1.5 degree C pathway, increasing exposure to climate solutions, decreasing climate risks, and supporting ecosystem, biodiversity, pollution prevention and water stewardship,” says Mr Houghton-Brown, head of BTNZ’s investment solutions.
This comes after the 2021 Aotearoa New Zealand Investor Coalition for Net Zero, where four KiwiSaver providers pledged to become net-zero carbon fund managers. This included Pathfinder Asset Management, Mercer Investments, Russell Investments, and BTNZ.
BTNZ believes it is the first KiwiSaver provider and NZ asset manager to allocate assets to a global sustainable shares index in alignment with the EU Paris climate regulations.
BTNZ has made an initial investment of $200m, which is expected to rise by $100m in the next six months. BTNZ believes that investing sustainably is a powerful way to achieve results both on and off the balance sheet. Their stance is that positive financial performance is linked to contributing tangibly to the world.
Westpac commented that “New Zealanders are increasingly vocal about wanting to invest in funds that align with their social and environmental principles. They want action and less talk around sustainability issues. We’re working to deliver funds that can grow their wealth and support positive environmental outcomes, so that together we can start to make a real difference.”
BTNZ intends to achieve its goals by investing more in environmental, social and governance (ESG) companies. They plan on excluding the worst climate and biodiversity offenders – fossil fuels, controversial weapons, whale meat, tobacco, predatory lending, and companies in violation of the UN’s Global Compact principles.
BTNZ’s full commitment will be disclosed in its new Sustainable Investment Policy set to be released within the next few weeks.
What does this mean for KiwiSaver Investors?
Westpac KiwiSaver members’ assets will be allocated to a global sustainable shares index which is adhering to EU Paris climate regulations.
This also means that members of Pathfinder Asset Management, Mercer Investments, and Russell Investments will have allocated assets for their funds to be net-zero carbon funds. For anyone unsure about investing more in ESG companies, this is an opportunity to talk with a financial advisor about how this affects you and your KiwiSaver. National Capital is a research led, independent KiwiSaver adviser providing free KiwiSaver advice to KiwiSaver members. We are paid by KiwiSaver providers.
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