Is your KiwiSaver fuelling the climate crisis?

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Oct 25, 2023

Kia ora, welcome to Future Proof brought to you by AMP. I’m Ellen, thanks for joining me this week.

New Zealanders are generally a kind-hearted bunch. Eighty-eight percent of us don’t want our retirement fund enabling environmental damage, and three-quarters of us would prefer our KiwiSaver didn’t finance planet-heating fossil fuels, according to one survey.

The folks at AMP found similar results when they surveyed their customers a few years ago: “sustainable or responsible investing” was up there alongside “low fees” and “good returns” in terms of importance. So, the company pivoted in 2021, putting sustainability at the core of their investment philosophy with a four-pillared approach.

First, this meant excluding any exploration, extraction, storage, or transportation of fossil fuels from their portfolios. “We don’t want to be involved with creating any more fossil fuel reliance. We’ve been around for 170 years and would like to be around for another 170,” says Aaron Klee, General Manager, Investment Management and Services. “Thinking about young people just starting with their KiwiSaver now, what will the world look like for them in 2050? Aligning how we invest money with that intergenerational perspective is important.”

Avoiding the bad is just one part of sustainable investing. Having a climate kōrero is another way fund managers push for change. AMP, through its investment partners, engages with companies to shift their practices, and with the wider industry to influence sustainability.

But most importantly, sustainable investing means supporting the good stuff. In this space, AMP’s strategy is to “lean into companies with higher environmental, social and governance (ESG) ratings or companies that are decarbonising,” says Klee. “The next phase for us is leaning in harder and investing capital into creating solutions that help the world progress on this journey of decarbonisation.” They’ve committed to reaching net-zero carbon emissions across their portfolios by 2050 or sooner.

Investing for positive impact doesn't come at the sacrifice of performance, either. Data from the past decade shows that sustainable investing stacks up, while models also forecast better future returns – especially for investments in climate solutions. Put simply: “You want to own things that people want for the future,” says Klee.

So how can you tell whether your KiwiSaver is fixing, rather than underwriting, the climate crisis? Transparency and evidence is super important. Investing “recipes” should be clearly articulated by providers, Klee says. “Everybody's talking about responsible or sustainable or ethical investing. That's just normal now. Our job is to make sure that the ingredients inside match the label. It’s part of walking the talk.”

(Sponsored content)

AMP believes that investing in a sustainable future is the best way to achieve long-term investment success. That's why they integrate environmental, social, and governance (ESG) factors into all of their investment decisions.
AMP supports companies that are making a positive impact on the world while avoiding those that are causing harm. AMP is also working to reduce its own carbon footprint and achieve a net zero outcome by 2050 or sooner.
Learn more about AMP’s sustainable investing approach here.

Murky methane debates heat up

The Parliamentary Commissioner for the Environment Simon Upton has written to three farming groups, calling them out for wrongly claiming a recent report they commissioned represented “new science” on methane emissions. RNZ climate correspondent Eloise Gibson broke the story, and Newsroom’s Marc Daalder has further analysis of the controversy: “By pretending it's an issue of science, the sector is seeking to obfuscate the necessary conversation about what level of global heating is acceptable from New Zealand's agricultural activities,” Daalder writes.

Overseas, former officials from the UN Food and Agriculture Organization (FAO) say their work on methane emissions dating back to 2006 was censored. Pressure from the agriculture lobby led to management making numerous attempts to suppress investigations into the cow-climate change connection, The Guardian reports.

Melting of West Antarctic ice sheet “might now be inevitable”

Even if we drastically reduce emissions, existing ocean warming has “locked in” continued melting of the West Antarctic ice sheet, a new modelling study suggests. This particular ice sheet is the icy continent’s largest contributor to sea level rise – but not the only one. “Much of the wider Antarctic Ice Sheet can be saved with strong climate action, and with it many metres of avoided sea-level rise,” says professor Matt King from the University of Tasmania, who also notes that limitations in the model may mean there is hope yet for the West Antarctic ice sheet.

There’s hope too for Greenland’s ginormous ice sheet, which could be saved from complete meltdown even if the world exceeds warming targets – as long as we throttle back atmospheric greenhouse gas levels and global temperatures, according to another modelling study. “There’s a chance to prevent some serious consequences even if there’s no political will now,” says lead author Nils Bochow. “But we should act today rather than later.” If all the Greenland ice were to melt, it would raise global sea level by seven metres.

EU to push for deal to phase out fossil fuels at COP28

Climate ministers from 27 EU countries have agreed to push for a deal to phase out “unabated” fossil fuels at the upcoming UN COP28 climate summit. The agreed negotiating stance positions the EU as an ambitious player at the global climate talks, but the word “unabated” leaves the door open for countries to continue burning coal, oil and gas, if they capture the resulting carbon.

A message from Spinoff editor Madeleine Chapman

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- Madeleine Chapman, Spinoff editor

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When disaster strikes, bikes and cycling infrastructure offer solutions, argues Timothy Welch.

A humpback whale “kelping”. Image credit: Lorinnah Hesper.

To finish this issue, whales like to put seaweed on their head, according to new research. The behaviour, called “kelping,” has been observed in four different whale species around the world. Whales have also been observed swimming around with kelp in their mouth, which may serve as a makeshift toothbrush. Touching seaweed might provide a nice sensation for whales, the researchers speculate, or kelping could perhaps be a social activity.

Have a whale-y good week,

Ellen