NZ Super Fund gets A+ for responsible investment by UNPRI

Friday 12th August 2016

The New Zealand Superannuation Fund has again scored an A+ rating for governance and strategy around responsible investment in the latest benchmarking report by the United Nations-supported Principles for Responsible Investment.

The UNPRI is the internationally accepted benchmark for how institutional investors should manage environmental, social and governance issues across all asset classes.

In the 2016 report, the $30.3 billion Super Fund received A or A+ ratings across all eight asset class categories it reported on, similar to last year’s results when it reported on only three asset classes.

The report puts the NZ Super Fund in the top tier of UNPRI signatories internationally with rankings in each class ranging from A+ to E. The fund, which invests to contribute to the costs of paying pensions, was a founding signatory in 2006.

Matt Whineray, chief investment officer for fund manager the Guardians of New Zealand Superannuation, said the UNPRI report confirms the fund's being managed in line with global best practice, with responsible investment practices becoming more widely adopted within New Zealand and globally.

The 2016 Responsible Investment Association Australasia (RIIA) report said the amount of New Zealand capital being invested responsibly has grown 28 percent in the past year to $78.7 billion with take-up now ranging more broadly from the largest institutions to boutique managers and KiwiSaver products.

Responsible investment correlates with strong financial returns, Whineray said. Current priorities for the fund manager is continuing to engage with NZX-listed companies on corporate governance and finalising a climate change strategy due to be released later this year.

The fund has been criticised in the past for not excluding more investments, including in 2014 an Israeli chemicals company which makes white phosphorus. The product has many uses including as a military smoke screen, though its use against civilians is illegal. At the time, fund chief executive Adrian Orr said it had found no grounds for excluding the investment because its analysis showed the company operated within national and international laws and any conventions New Zealand has signed.

The fund began investing in 2003 and has achieved a net 9.6 percent per annum return since inception. Withdrawals are not scheduled until 2029/30 and it’s expected to peak in size in the 2080s.

BusinessDesk.co.nz

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