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Your money can achieve multiple things at the same time. It can provide you with investment returns (through income and capital gain), but also improve the world, while it is working for you.
Ethical investing means that your investments do minimal harm to the world (through negative screening), but also contribute to the world and peoples lives by being sustainable, making an impact and producing new products and services.
But investing ethically is not easy. Just because an fund has a name that includes the words 'ethical', 'responsible', 'sustainable', 'ESG', it does not mean that it is 'walking the talk' or is true to its name.
That is why Moneyworks have partnered with Mindful Money to develop a unique and proprietary analytical system, to understand what the underlying investments our clients hold actually are. We identify any 'nasties' in our clients KiwiSaver and investment portfolio and report on that on a personalised basis to our clients.
As well as understanding how the fund managers that we recommend approach their ethical investing responsibilities, we discuss these 'nasties' holdings with the fund manager to understand their goals in holding the investment.
Often, it is because the manager is actively engaging with the company to get change in that aspect, and we have seen numerous examples where this corporate engagement works and makes a difference. Other times however, there is no genuine attempt or ability to bring about change, and after we have completed our analysis the decision may be to divest (stop using) that fund manager, whether for all clients, or sometimes for a specific client if there is a particularly strong conviction.
Read more about our approach and how it could work for you.
There are three stages to the Moneyworks Ethical Investment Analysis
1. Understanding our clients Ethical Investment Preferences
We discuss our clients preferences and opinions when we meet them and then annually at our annual review meeting. Clients rank the 'nasties' categories based on a score of 1 (Comfortable with), 2 (Prefer not to hold) and 3 (No exposure if possible).
This information then feeds into whether our clients have a fully Ethical Portfolio or a Hybrid portfolio (which has more exposure to active engagement instead of sustainable and impact investing).
2. Ethical Investment Analysis number crunching
Partnering with Mindful Money, we analyse the holdings of each fund manager that we review and recommend.
This information is then fed into a personalised ethical investment analysis for each client, based on the investments that they hold in KiwiSaver, their portfolio and some other direct funds. After crunching the numbers, we produce a report which is included in the financial plan and annual review, which shows each client in a graph what exposure they have (by different investment type) to each of the 'nasties'.
The ethical analysis then drills down into the actual dollar exposure by each investment type and nasty and identifies the top 10 underlying 'nasties' companies held by that investor, and we provide a brief summary in the report of why the investment is concerning.
Behind these reports is an extensive analysis that enables us to dig deeper for any client on a particularly 'nasty' (eg weapons) and identify which companies are actually involved in egregious behaviour (like making weapons) as compared to being suppliers to the weapons companies. This in depth information enables investors to avoid the 'nasty' company (if possible), and if not possible to understand the material allocation to that company (for example it could be $23!).
3. Ethical investment Education
Educating our clients about the investment issues has always been a core value at Moneyworks. We do this through our public seminars, in our annual review documentation (with a separate project each year) and importantly through our monthly newsletters. As well as the monthly newsletters that you can sign up for and that are on this website, our Membership Fee/Investment clients receive additional more detailed newsletters from time to time as required.
As part of our commitment to Ethical Investing - Moneyworks sponsored the 2021 and 2022 Mindful Money Awards.
For more information, check out the page on the Awards at https://mindfulmoney.nz/pages/...
As members of the Responsible Investment Association of Australasia we feel that we have a responsibility to volunteer where our skills may assist the organisation.
Our volunteer activities to date include:
2021 April - May - Judge on the ESG Research Award - Non Broker (Carey Church)
With her advice, Carey has helped me focus on what is important to me and prioritise my financial and life goals. She remembers things that I have said in the past that are important to me and then reminds me when I’m making big decisions -bringing me back to what I want to achieve and how I want to live my life.
Carey pays attention to me and the fact that money is not the most important thing to me, that I have a real life and that all of those things (including my family and relationships) play a role in achieving my life goals. Financial security is part of that picture but not the whole.
She focuses on what success is for that person - it is different for different people and she helps me to define and stay true to my own definition of success.
Sue Watson - Waiheke
Moneyworks NZ LtdP: 0800 225 621E: firstname.lastname@example.orgP O Box 1003, Cambridge 3450
Licensed Financial Advice Provider - FSP 15281
Regulatory Information: Moneyworks is a Licensed Financial Advice Provider (FSP15281), and AML Reporting Entity and is supervised by the Financial Markets Authority.
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