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The Wise Response Society, which promotes sustainable approaches to climate change challenges, believed funds were ‘‘talking the talk but not walking the walk’’ on sustainability and social issues.
It has written to Prime Minister Jacinda Ardern identifying what it described as ‘‘major problems’’ and ‘‘worrying trends’’ with New Zealand funds.
The letter, signed by chairwoman Prof Liz Slooten, said investment funds, contrary to their claims, did not seem to be making decisions on ethical grounds.
That would significantly hinder attempts to meet the threats of climate warming and human rights abuses, she said.
Wise Response investigated six investment funds — AMP Capital, AMP Wealth Management, Generate, the New Zealand Superannuation Fund, Pathfinder and Simplicity — and Prof Slooten said none passed the group’s ‘‘ethical test’’.
Speaking to the Otago Daily Times, Prof Slooten said if the sector failed to limit its investment portfolios to companies that cared for people and the planet, it would also become part of the problem.
‘‘It is like going to the supermarket and something is claiming to be sugar-free but really it is full of fat,’’ Prof Slooten said.
Wise Response believed engagement and reporting practices were inadequate and lacked transparency for investors.
The group made some recommendations to the prime minister about how funds could be ethical.
It believed a fund needed to define its values, identify what types of investment would be excluded, engage with companies and investments where differences existed and report on the results of that engagement.
Prof Slooten wanted fund directors to adopt values statements which used ethical language and included social and environmental responsibilities.
When contacted, New Zealand Funds Management chief executive Michael Lang said he believed there had been a ‘‘huge change’’ over the past five years in how investment funds thought about sustainable issues.
He said there was still work that needed to be done, particularly improving the way funds disclosed what they were doing.
‘‘That would not be an onerous obligation for the industry and it would increase knowledge and transparency and it would enable analysis to be done.’’
Mr Lang believed funds could disclose that in their annual statements to members, on their websites or through their quarterly updates.
When contacted, a spokesman for the prime minister’s office referred the ODT to Minister of Commerce and Consumer Affairs Dr David Clark.
Dr Clark said the Government’s commitment to take action on climate change remained ‘‘steadfast’’.
It had been working with New Zealand’s two largest investors, the NZ Super Fund and ACC, to develop an ethical investment framework, he said.