Good money gone bad

KiwiSaver and other fund managers may aim to avoid fuelling hate, war and environmental loss but responsible investing is proving something of a minefield.

- BY DIANA CLEMENT

What if, when it comes to weapons, it was the “responsible” thing for a KiwiSaver manager to buy shares in companies producing defensive weapons? A recent Mindful Money survey found 80% of New Zealanders don't want their money in weapons.

But the moral landscape is shifting for some as the industrialisation and digitisation of warfare change the goalposts, with drones and anti-aircraft batteries protecting innocent Ukrainian civilians while chips meant for microwave ovens end up in Russian missiles.

Despite their members’ reluctance to support arms manufacture, KiwiSaver companies’ investments in weapons have surged by 40% in the past year.

Mindful Money’s annual stocktake of which pots of gold our KiwiSaver and other managed fund investments are chasing found total weapons investments by KiwiSaver companies reached $392.4 million for the year to March 2025.

In data released exclusively to the Listener, the responsible investment charity found that of a total $128 billion invested by 406 KiwiSaver funds, $11 billion is invested in activities that New Zealanders say they want their savings to avoid. Apart from weapons, these include human rights violations, environmental harm, animal cruelty, fossil fuels and social harms such as tobacco, gambling and pornography.

The charity's founder, Barry Coates, says the chase for higher returns is behind the increase. In addition to direct investment in weapons companies, KiwiSaver providers are also increasing their holdings in non-weapons companies supporting operations in Gaza, such as bulldozer maker Caterpillar and Amphenol, which makes hi-tech connectors, sensors and antennas.