This guest article was written by the team at Booster
Booster and Conscious Consumers
Conscious Consumers began because they know that people want to use their money ethically. We’re working together to spread the word about Booster’s socially responsible investment (SRI) funds.
At Booster, we’re helping New Zealanders grow their financial confidence and money in an ethical way. Over 100,000 people trust us with their money, and we’re proud to have been fully owned and operated in New Zealand since 1998.
We love helping New Zealanders make a positive difference with their KiwiSaver money and other investments, so we’re stoked to be the first financial services company working with Conscious Consumers.
What’s socially responsible investing?
Socially responsible investing (SRI) is typically about avoiding investing in companies that sell products or services that are seen to have a negative effect on people and the environment. If you put your money in an SRI investment fund, you’re using your money to support what you believe in.
SRI can also mean positively supporting companies that act more responsibly on environmental, social and governance (ESG) issues. Investment managers look at the ‘social’ issues of how a company deals with suppliers, customers and the people who live where it operates. They also check ‘governance’ – how a company is organised and managed, including how it treats its staff. As a result, companies know that people care how they do business.
A good example of the power of socially responsible investing comes from the 1980s. Investors – especially institutional investors that invest for their members – took their money out of South African companies in protest at the apartheid system. Economic pressure from this ‘divestment’ helped push the South African government into fast-tracking talks that ended apartheid.
Keep this in mind – choosing an SRI fund can change the way that business is done for the better.
Deciding what’s socially responsible
Companies can be rated on a wide range of things, and each provider of socially responsible investing (SRI) funds has a different view of what an ethical investment is. This means there are lots of different SRI funds out there, so be careful when you’re choosing a fund that it’s what you expect.
Socially responsible investing often uses ‘negative screening’ to rule out companies and industries that can cause harm.
We suggest you look for funds approved as ethical. We’re proud to say that the Responsible Investment Association Australasia (RIAA) has certified our Booster KiwiSaver Scheme’s SRI funds. We’re the first KiwiSaver scheme provider to have our funds certified by RIAA – and we like to think they’re still the best.
Will my returns be lower if I invest in SRI?
We’ve been managing money for nearly 20 years, and we know there are plenty of good companies out there. Not investing in a few companies that cause social harm shouldn’t reduce the money you can make.
In fact, over the last three years, our SRI Growth Fund has done a little better than our normal Growth Fund!
A 2016 Colmar Brunton poll found that 8 out of 10 New Zealanders said they’d stop buying a company’s products if they heard they were irresponsible or unethical. We all care about this stuff, and companies that listen to people tend to stick around.
Rest assured, you can let your money reflect your beliefs without being worse off.
Booster’s SRI policy
Here at Booster, we use the common approach of ‘negative screening’ to rule out companies and industries that can cause harm. We have a set of rules to work out the harm that a company’s activities might cause. If a company passes the test and we think they’ll make money, they’re in.
Because things change, we’re always checking the companies in our socially responsible investing funds. Our in-house research team looks at all our investments to make sure they’re still right for our SRI funds.
Sometimes, it’s hard to know how a company makes its money and therefore if it meets our SRI rules. To be safe, if we’re at all unsure then we’ll exclude it when deciding where to invest.
We always invest as responsibly as we can, so even with our non-SRI funds we follow the voluntary Principles for Responsible Investment. The United Nations supports these principles, which were developed by investors for investors.
Our SRI funds
We offer two socially responsible investing (SRI) funds to members of the Booster KiwiSaver Scheme. The Responsible Investment Association Australasia (RIAA) certifies our SRI funds.
Our rules for SRI funds mean we don’t invest in companies that make money from being directly involved in producing any of the following:
weapons and firearms
genetically modified organisms (GMO).
As an example, we don’t include SkyCity in our SRI funds. This is because they make money from people gambling at their casinos.
Some companies or industries have ‘incidental exposure’ to some of these areas. For example, supermarkets often sell alcohol and tobacco, although most of their profits come from selling other goods. Negative screening may not rule out this kind of industry or company from SRI funds.
The Booster KiwiSaver Scheme SRI funds mean you can invest in a way that reflects your personal values. And you can choose from two different options depending on your taste for risk. Choose our SRI Balanced fund if you don’t like to take big risks over time with your money. On the other hand, if you’re comfortable with big ups and downs over time, then our SRI Growth fund is for you.
It’s good to bear in mind that more risk usually means more money in the end. We always recommend that you talk to a financial adviser if you’re unsure. We can set you up with one near you for free!
Around 6,000 people have chosen our Booster KiwiSaver Scheme SRI funds, investing over $12 million in the last year. One of them called our SRI funds “the best plan in NZ”.
Go Green Expo
We’ve had a stand at the last three Go Green Expos and can’t wait for the next one in Wellington! We’ll be there on 11-12th November, along with Conscious Consumers.
Come visit us at stand E11 to learn more about our socially responsible investing (SRI) funds. Chat to Robbie, Dave and Dani to see how easy it is to switch your KiwiSaver account into a fund that supports what you believe in.
But wait – there’s more!
It’s just the start of a beautiful friendship between Booster and Conscious Consumers.
Using the Conscious Consumers app helps you make a positive difference by buying ethical food and products. So why not do the same with your KiwiSaver account and other investments?
We’ve got heaps of plans to help New Zealanders make sense of money, so stay in the loop and follow us on Facebook.
DISCLAIMER: Booster Investment Management Limited is the manager and issuer of the Booster KiwiSaver Scheme (the ‘Scheme’). The Scheme’s Product Disclosure Statements are available at www.booster.co.nz or by contacting your financial adviser.