LEAD
Mindful Money Ethical and Impact Investment awards The inaugural awards event recognised key industry players in the ESG arena – Matthew Martin has the lowdown on the individuals, companies and funds performing at the top of the responsible investment space.
R
esponsible and ethical investment is nothing new to an industry that often measures success at the bottom line but as global issues like climate change and wealth inequality keep making headlines it is getting harder and harder to ignore. So it came as no big surprise to Mindful Money founder and chief executive Barry Coates that so many companies and individuals were keen to support the first Mindful Money Ethical and Impact Investment awards held in Auckland at the end of June. Coates and Dr Rodger Spiller, profiled in this edition of ASSET, have been at the forefront of ethical investment conversations for decades. And slowly but surely investors themselves are forcing those slow to change their attitudes to what could save the world from rampant consumerism – socially responsible and ethical investment. “It should come as little surprise that credible ethical investment funds do well financially, as well as doing good,” says Coates. He says there is a strong relationship between well-managed companies and companies that operate with high sustainability standards – they benefit from loyal customers, motivated staff and pay no fines for environmental damage. “Returns for ethical funds are also boosted by avoiding social, environmental and climate risks. “For example, after repeated warnings of climate risk, ethical funds have avoided fossil fuels. The returns for other funds have suffered as the value of fossil fuel companies plummeted over the past six years.” Coates says excess returns may seem surprising to those who assume markets reflect all available knowledge. However, the link between ESG factors
and share prices has only recently entered the mainstream and is still not incorporated into many financial models. “A vivid example of information failure has been the strength of climate denial in countries like the USA, and the lack of understanding of climate risk.” He says evidence of strong ESG returns has been shown in research studies over the past two decades, including a review of thousands of studies by Morgan Stanley, and a similar analysis by Hamburg University. “At the same time, annual surveys of the public by Mindful Money and the RIAA show there is a growing understanding that ethical policies are good financially as well as for people and the planet. “It is one of the factors driving the rapid growth of ethical investing in NZ and internationally. “As the chief executive of BlackRock, the world’s largest asset manager commented “... the question used to be, why invest ethically? Now the question is why not?”
16 | ASSET 04 | 2021
Image caption – Harbour's Ainsley McLaren with Matthew Band from Trustees Executors.
The big winner Pathfinder Asset Management was the big winner on awards night picking up the Best Ethical KiwiSaver Provider and Best New Ethical Fund awards and was highly commended in the Best Ethical Retail Investment category. Pathfinder was set up in 2009 by its current CEO John Berry and CIO Paul Brownsey and is part of the global wealth management company Alvarium. Berry says it was a wonderful feeling for the team at Pathfinder to see their hard work rewarded. “We’ve been working hard and pushing boundaries in ethical investment for over a decade, and it feels amazing for the team to have this recognised,” he says. The award judges said Pathfinder had “... raised the bar with its KiwiSaver funds, providing the public with opportunities to invest in sustainable themes such as renewable energy and access to water and to invest in impact companies that create social and environmental benefits”.
