Funds’ ethics get rating
All the companies in the CareSaver KiwiSaver scheme’s funds have been through a ‘‘controversy’’ screen.
Screening is done by Dutch company Sustainalytics, giving controversy scores between one and five to the activities of over 15,000 companies worldwide.
There’s been a rise in public interest in where KiwiSaver funds have invested money, and CareSaver is using the controversy ratings in its bid to have the most ethically unimpeachable KiwiSaver on the market.
CareSaver used Sustainalytics to help it avoid companies in industries its investors want to avoid: tobacco, factory farming, controversial as well as civilian weapons, fossil fuels, gambling, and Kiwi investors beˆte noire, animal-testing.
However, CareSaver cofounder John Berry said: ‘‘The other screen we run is what’s called a controversy rating.’’
Any company that scored a five on the controversy scale was an avoid, or immediate sell, Berry said. ‘‘If something scores a four, we have to make a decision to hold or sell,’’ he said.
An example of a current five was pharmaceutical company Johnson & Johnson, which Sustainalytics said was facing 102,250 claims relating to seven of its products at the end of last year, including baby powder.
Another that rocketed up the ratings was Volkswagen last year when it was revealed it has been testing diesel emissions by locking monkeys in boxes and exposing them to diesel exhausts.
While there was a growing interest in ethical investing, there’s also been mounting concern that some KiwiSaver providers may be branding themselves as more ethical than they really are. It had even led the Financial Markets Authority (FMA) to begin a consultation on regulating claims as demand for responsible KiwiSaver products had led to concerns investors were being mislead.
Last month, FMA general counsel Nick Kynoch said: ‘‘While the FMA supports the development of the market for these products, there are associated risks and issues ... With the growing popularity of these products we want to ensure investors are protected from ‘greenwashing’ and have a clear understanding of what is on offer.’’
Just how confusing claims can be emerged earlier this month when Mindful Money, a not-forprofit developed by former Green Party MP Barry Coates, revealed that despite public protests several years ago, many KiwiSaver funds still had investments in companies linked the the nuclear weapons industry.
But those companies included some that people relied on in their everyday lives, like Boeing and Airbus.