Friday, March 1, 2024

A Little Help on Sustainable Investing: Why You Should Care, and How to Get Started

A conversation with AMP Sustainable Investment Analyst Livvy Mortimer on how to make sure your hard-earned money is going to funds, businesses and causes you care about – not NUCLEAR WEAPONS MANUFACTURING (yes, seriously!) and her guide to getting started with sustainable investing (and check out our previous story on why you should chat to a financial advisor!)

Capsule X AMP

Investing is such a hot-button topic right now, and as well it should be. Yup we’re in a cost of living crisis and sure, money has never been tighter (where does it GO!? Oh that’s right, cheese and interest rates…) but it’s still important to keep your investing contributions up if you can, because it’s going to make a huge difference in the long run.

But here’s the other thing – as the world lurches from one crisis to the next, there’s also a renewed focus on WHAT we’re investing in, and whether our money is helping those that are doing good in the world, or to companies that are involved in frankly shady and regressive industries.

I love to think of myself as an ethical person, but when I began researching sustainable investing for this piece, I realised I had no idea what my biggest investment of all, my KiwiSaver fund, was invested in. And it turns out, I was NOT impressed.

So, what can you do when your money has gone where your heart most definitely is not? We had a chat to AMP Sustainable Investment Analyst Livvy Mortimer about how to get started on your sustainable investment journey.

Livvy, first things first – what IS sustainable investing?

Sustainability means more than protecting and maintaining our natural environment – it’s also about helping to address a range of social issues to support a thriving community, economy and sustainable environment. Sustainable investment is about considering the impact our investments have on society and the world around us alongside other financial outcomes and business factors.

So, broadly, it’s making sure that you’re investing in businesses and funds that are doing good in the world, rather than harming it?

Yeah – for example at AMP, we say no funds that are involved with fossil fuels, palm oil, nuclear weapons or power, whale products and tobacco. We support the good by integrating environmental, social and governance factors into investment decisions, and don’t invest in those causing harm – while reducing our own carbon footprint.

It’s absolutely wild that a lot of us don’t know where our money has gone, either in managed funds or in KiwiSaver.

It is, right? There have been some instances in the the past where people have found that their money has been invested in places they didn’t quite expect, for example there was one around weapons – some Kiwi investors were invested in nuclear weapons, which is really something you don’t expect from your KiwiSaver scheme provider!

I know this is going to sound so dumb, but sometimes I forget that my KiwiSaver is actually an investment – like, I put my contributions in and so does the government and so does my employer, but I never really think about what all of that is going towards!

No, I totally agree – I used to think the same thing, especially as the government contributes, so how could it be invested in something like nuclear weapons, right!?

Livvy Mortimer

EXACTLY! Are you finding that more and more people are wanting to get amongst sustainable investing, and ensuring their money is going to good?

Yeah, we grew up with all of this information about climate change, for example, and it’s had a huge impact on our lives, but we’re not really seeing that same sort of reaction from businesses. But that’s changing, and our generation has more of a say, and is demanding sustainable products.

OK, so the big questions. How can people ensure that their investments are sustainable and ethical? Can you give us a little help in know how to start?

Certifications are a great place to start with sustainable investing. The Responsible Investment Association of Australasia (RIAA) offer certifications on sustainable investment funds, and they also offer a tool where you can put in your values, and you can see what investment funds align with them.

Is that the same for KiwiSaver funds?

Yeah, there are KiwiSaver funds in the tool too.

As a Sustainable Investment Analyst, and speaking very broadly of course, what would you steer people towards as good options?

I think climate change is a big one for me, especially with KiwiSaver funds because of that long-term timeframe, and the ability that we do have to have an impact with climate change. Other things I’d be looking for are certifications, to avoid greenwashing (which is where a fund or business will provide misleading or false information about how environmentally sound investment products are).

AMP is committed to helping its members achieve their financial goals while also creating a positive impact on the world. Learn more about AMP’s sustainable investing approach here!

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