The Rise of Ethical Investing

As KiwiSaver advisers, we’re starting to see a shift towards ethical investing in the investment landscape in New Zealand. The Responsible Investment Association Australasia and Mindful Money’s latest report Voices of Aotearoa: Demand for Ethical Investment in New Zealand 2024 has revealed a growing demand for ethical and responsible investment options among New Zealanders. With 77% of respondents expecting their KiwiSaver or investment funds to be managed ethically and responsibly (a notable increase from last year) it’s clear that consumers are beginning to prioritise their values alongside financial returns.

This growing expectation aligns with a broader societal movement towards sustainability and responsibility. In fact, over half of Kiwis (57%) are open to switching their funds if their current investments don’t align with their values.

Today, our clients are focused on more than just traditional concerns like tobacco and weapons. People are increasingly interested in how companies address issue like human rights, environmental sustainability, and animal welfare. However, with this growing interest comes a heightened awareness of greenwashing - 51% of people are worried about misleading claims in the investment world.

As advisers, it’s essential for us to stay informed about these important topics so we can help our clients make choices that truly reflect their values - finding investments that are both transparent and trustworthy.

The good news is that choosing an ethical fund doesn’t mean sacrificing high returns. Many ethical investment options are performing just as well, if not better, than traditional investments. 2021 Research from the Responsible Investment Association Australasia, shows that ethical funds in New Zealand often match or exceed the performance of their traditional counterparts over time.

In summary, the demand for ethical, responsible, and impact investing is more than just a trend - it’s a fundamental shift in how New Zealanders approach their finances. As advisers, we have a responsibility to guide our clients through this evolving landscape, ensuring their investments reflect their values while still providing them with the returns they need to build a comfortable retirement.

Are you interested in ethical investing but don’t know where to start? Complete the short form below to get connected with a KiwiSaver adviser. Our experts team can help you find a fund that best suits your values and investment goals - free of charge.