Mindful Money, a KiwiSaver research charity promoting ethical investment, is calling for fund managers to immediately divest from Russian companies, particularly major state-backed enterprises, government bonds and the oil and gas companies that fund much of Russia’s military spending.
So far, in response to the Ukraine invasion, New Zealand has imposed travel bans and diplomatic restrictions on Russia and is considering putting a halt to Russians making local investments.
There are not yet any sanctions on specific Russian companies and Barry Coates, CEO of Mindful Money, implored fund managers to take a strong stance by divesting voluntarily as "a responsible investment position."
"The New Zealand public should be assured that their funds are not supporting the Russian state at a time of massive suffering for the people of Ukraine," he said.
Russian investment made up a very small portion New Zealand funds as a whole (including KiwiSaver, retail investment funds, NZ Superannuation Fund and ACC), so divesting was unlikely to have a major impact on the value of these investments, but was an important value judgment.
"It is important that the New Zealand public’s hard-earned savings are not used to support Russia’s war mongering,” said Coates.
Most of the New Zealand investments are in large Russian producers of oil, gas and coal - industries typically dragging the chain on renewable energy and another good reason to pull the pin, he said.
“Many ethical KiwiSaver and investment funds in New Zealand have already excluded fossil fuels from their portfolio holdings. But there is still over $1.5 billion of KiwiSaver funds invested in fossil fuels."
“This is not an issue of ethics versus the economy. The huge losses in fossil fuel investments over the past decades suggest that this makes sense financially as well as ethically.”
Mindful Money has trawled KiwiSaver and other investment funds for holdings in major Russian companies - view the list here.
Meanwhile, in a move thought to be the first boycott of a Russian product in New Zealand, The West Auckland Trusts will remove thousands of bottles of Russian vodka and beer from their stores, to be replaced on the shelves with a Ukranian flag.
"The move is a response to Russia raising its nuclear alert level along with a growing groundswell of consumer sentiment," said Allan Pollard, Trusts CEO.
9 Comments
I suspect the global wealthy Jewish cohort and their money handlers, which are over represented in the likes of Wall Street and the The City of London, will do no such thing.
However, it is Israel that made the most memorable overture to Russia of a historical nature suffused with great poignancy. Israel prevented the US from transferring to Ukraine its Dome missile defence system which would have been a game changer in the present conflict on the plea that it did not want to act against Russia!
Both Washington and Tel Aviv hushed up this spat until its disclosure recently by the media. Then came the request from the Biden Administration seeking support from Israel to co-sponsor its resolution in the Security Council regarding Ukraine. Israel refused! The US made its displeasure known. Link
Actually Russia will present some of the most interesting investment opportunities once this war is finished. In the absence of sufficient investment for energy transition we still need fossil energy as much as ever to sustain our world.
That said I hope the Ukrainians can see off the Russian attack.
Raytheon and Lockheed Martin are going gangbusters. They make the Javelin missile system being used against Russian tanks. Germany's second largest importer of gas is Norway, and that slice of pie is likely to grow, along with the profits and share prices of Norwegian gas producers. The switch from growth to value has made tobacco stocks go gangbusters too. British American Tobacco is up 20% or so in the last few months. Many of those companies pay fat dividends too. Opportunities abound.
Good link Audaxes. Always check out the money men. They're hiding in the background keeping their heads low. I do, however, feel the neo-nazis is overdone and it could very well be part of Russian propaganda.
Ukraine and Russia will suffer for years to come. Russia for at least ten years after Putin has gone by whatever means. Ukraine will get massive aid from the West and I wouldn't be surprised if that's the reason why Zelensky says no talks until the bombing of civilian targets stop. We are seeing the signs of an Aleppo in Kiev and Kharkiv. Russia will exhaust itself in the Ukraine.
I would draw a distinction between companies associated/part owned with the Russian government, and normal/legitimate Russian companies and consumers. Quite frankly there is a developing streak of hysterical Russophobia that is going a bit far in the West.
Were Mindful Money calling for divestment of US equities following any of their bloody military interventions of the last 20 years? The Russians have a long way to go to match the Iraq death toll...or even Libya.
And stopping the sale of Vodka is just childish and pointless.
Thanks Brutus. Unfortunately we weren't around over the past 20 years (we started mid-2019). I agree that we should look at all crimes against humanity. We have previously highlighted arms sold to Saudi Arabia for use in Yemen and Myanmar companies complicit with their regime's human rights violations. We will continue to monitor such conflicts. In each of these cases, human rights abuses have also resulted in financial costs for investors. This can be avoided by ethical screening and proactive investment management.
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.