Put yo money where yo mouth is

Turns out, our pension money could be invested in weapons. Yet I am almost not surprised.

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The rule of thumb is, as soon a person’s pension fund reaches a stage where they can buy a middle-sized car, then the person starts wondering: what is my money invested in? - And you are likely to find all sorts of stuff.

What the fffffffff…

Laid back, yet with a long and glorious history of activism. Last year, New Zealanders popped THE question: What's in my pension? - shit wasn't pretty.

Since the 80s, the New Zealand government has been passing laws that restrict investments in nukes, land mines and cluster bombs (A.K.A controversial weapons). This is important to note because in August of 2016 NZ news outlets covered a story explaining that the KiwiSaver (NZ’s version of a non-voluntary pension fund) had funds invested in controversial weapons. All hell broke loose, investors panicked, police conducted raids, the public outraged.

The result? In six months, the country experienced a 2650% increase in negative screening (a responsible investment strategy that screens out companies involved in controversial businesses, like weapons and animal testing). Responsible investment funds grew from $1.3B to $42.3B in 2016. Of which, the large majority where invested using the good ol' negative screens, however, the study also found investments flowing to sustainability-themed and impact investments.

Now, excluding companies involved in controversial business lines like weapons manufacturing, tobacco production, and animal testing is but a little sip of what "sustainable" investing is.

Summer may be ahead

Investing in sustainability means sacrificing financial performance, right?

Wrong. A study conducted by the Morgan Stanley Institute for Sustainable Investing, which examined seven years of data from more than 10,000 funds, found that investing in sustainability often exceeded the performance of its counter nemesis (traditional investments).

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This seriously growing trend is driven by people who don’t want their hard earned cash going to some shitty, regressive companies. In fact, the US SIF estimated that by the start of 2016 about 1/5 of all managed investments - more than $8T - were invested in some form of sustainable investing category, growing at about 15% per year.

But, with everything ‘ethical’ or ‘sustainable’ one most encounter with high levels of skepticism.

For this reason, here are some research reports and articles that we think will help you step up your sustainable investing game. 

  • Check out the GIS Alliance report. In particular Figure 2 [Page 8] shows the amount of assets allocated per sustainable investment strategy and region.
  • The Morgan Stanley Institute for Sustainable Investing. It shows the market trends and demands in the space of sustainable investing, and how Millennials are driving the growth.
  • This one goes deep. A United Nations PRI report, which is a practical guide on how to use sustainability research and data when making investment decisions. The guide includes case studies on integration techniques that apply to investment strategies including fundamental, quantitative, smart beta and passive investment. 

Because even though you are getting the miles up on your pushbike, you could still be investing in fossil fuels.

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Author: Erik Sumarkho