02.07.19

Investing mindfully

By Barry Coates

Mindful Money aims to switch investment funds from pollution and exploitation towards sustainability. It has just launched a new ethical investment platform that provides radical transparency for KiwiSaver funds and empowers users to invest for good. Founder Barry Coates explains. 

For too long the financial system has operated as if it was divorced from the real economy. The metrics have been all about financial returns and risks, not about the impacts on people, our natural world or the climate. How money is used has been irrelevant, allowing finance to flow freely into tax havens, weapons, pollution and exploitation. By contrast, investing in sustainability has been seen to be too risky, too long term and unproven.

Most of us have gone along with this misguided view of finance, putting our hard-earned savings into KiwiSaver accounts without knowing how our money was used. In reality, only 1% of KiwiSaver funds have policies to avoid sectors like gambling, pornography and alcohol. And only 2% avoid investing in exploration and production of fossil fuels.

Mindful Money’s new platform can tell you whether your money is invested – in fossil fuels, weapons or in companies that violate human rights or test cosmetics on animals. All you need to do is enter the name of your KiwiSaver fund and Mindful Money will let you know what you’re invested in.

This transparency reveals that over $4 billion of New Zealanders’ KiwiSaver funds are invested in issues that they say they want to avoid. For example, despite our net zero emissions target, KiwiSaver funds invest almost $1.2 billion in fossil fuels; $800 million is invested in socially destructive sectors like tobacco, alcohol and gambling; and $1.6 billion on using animals for non-pharmaceutical testing, mainly for cosmetic products.

There are better alternatives. As an individual, it is hard to have time to do the research and compare the options. But now Mindful Money has been set up as a charity to do objective research and identify funds that meet acceptable standards for ethical investing. You can use our website to find the fund that fits your values. It’s free, quick and easy to shift your funds to a more ethical alternative.

And being ethical doesn’t mean lower returns. In fact, the weight of research says that, on average, ethical funds provide financial returns that as high or higher than conventional investment. And the risks are generally lower. It makes sense – companies that are more sustainable have loyal customers, motivated employees, no environmental liabilities and opportunities for growth.

Invest ethically. You can feel good about your KiwiSaver. You can do good with your investments. And you can earn good returns.

The right question isn’t why invest ethically. It’s why not!

Your investment can make a difference. For example, the fossil fuel divestment campaign has achieved amazing success. As Bill McKibben wrote recently, the campaign has not only persuaded investors to divest US$8 trillion, it has also helped de-legitimise the fossil fuel sector and is speeding up their decline.

Mindful Money is a charity because we want to shift investment in companies away from pollution and exploitation towards companies with high standards. Our aim is to make investing a force for good. A massive shift of investment is crucial for the transition to zero climate emissions, to meet the Sustainable Development Goals and to improve wellbeing, in New Zealand and overseas. We are starting with the $59 billion in KiwiSaver funds.