Media Release: Nikko AM launches responsible investment guide

Nikko AM launches responsible investment guide

New e-book to help New Zealanders understand what to look for in a responsible portfolio and how to align investment and KiwiSaver strategies with personal values

Leading New Zealand active fund manager and KiwiSaver provider, Nikko AM, has released a new guide to help Kiwis navigate the increasingly complex ethical investment landscape and understand how they can contribute to a better future.

The GoalsGetter Guide to Responsible Investing explains the differences between Environmental, Social and Governance (ESG), Responsible Investment (RI) and Socially responsible Investment (SRI) strategies and walks investors through how they can align an investment strategy with their personal values.

Nikko AM NZ’s Managing Director, George Carter, says that ESG and RI strategies are typically more nuanced in how they view investment opportunities, while traditional SRI investing views the world through a more binary lens.

“Consider a company that manufactures alcoholic drinks, for example. An ESG/RI framework will consider factors such as how the company treats its staff, looks at its supply chains and minimises its impact on the environment – and based on these criteria will determine whether the business looks attractive at a particular price. In contrast an SRI fund opposed to alcohol simply won’t invest in the company, regardless of those factors,” says Carter.

While once considered mutually exclusive, commercial performance and a clear focus on ESG are now inextricably linked – a relationship Carter says investors need to recognise as we head deeper into an economic downturn.

“Companies that are transparent around their values and sustainable goals can inspire a loyalty among both customers and staff that will help protect its profits in a downturn. Therefore, we can expect that companies with good governance will be better positioned to ride out current and future challenges.”

The relationship between company and investor is by no means one-way. By choosing to apply a responsible investment strategy through an active fund manager, Carter says Kiwis have the power to create the kind of world they want to live in.

“As large shareholders, active fund managers have the opportunity to engage proactively with companies and can influence them to lift the bar in areas where ongoing improvement will bring meaningful, positive change. By investing through actively managed funds alongside others who share their values, investors can ensure their voice resonates loud and clear.”

Ends

George Carter’s 5 things to look for in a responsible investment portfolio

Values alignment

Think about your goals and values and look for funds (and fund managers) that match. Look for holistic approaches rather than one-off exclusions.

Less negative vs more positive

A specialist portfolio manager will apply exclusions and positive screening to not just reduce harm but promote positive impact.

Don’t forget fees

You shouldn’t have to pay more for investing sustainably.

Robust screening

Ask your fund manager how they screen companies - frameworks like the MSCI ESG Research Tool are no substitute for rigorous assessment.

Invest locally – but not exclusively

Supporting local is good, but for robust diversification add a global mix of companies and debt securities.

You can download a copy of The GoalsGetter guide to Responsible Investing here