New Zealanders’ retirement savings are increasingly tied to companies implicated in human rights abuses, raising concerns about the ethical alignment of KiwiSaver investments. A new report from responsible investment platform Mindful Money reveals a 43 percent surge in investments linked to such companies over the past six months, now totaling more than $3.5 billion. This growing disconnect between investor values and actual investment allocations is prompting calls for greater transparency and stricter ethical screening by KiwiSaver providers.
The findings underscore a widening gap between what New Zealanders say they want – investments that avoid contributing to harm – and where their money is actually going. Public surveys consistently show that avoiding human rights abuses is the top priority for KiwiSaver members, yet investments in companies facing serious allegations continue to rise. This trend is fueled not only by an increase in the number of companies identified as violating human rights, but also by increased investment *in* those companies, despite growing awareness of the risks.
Growing Concerns Span Multiple Conflicts and Industries
The scope of these concerns extends beyond a single region or industry. Mindful Money’s analysis highlights increasing exposure to companies linked to conflicts in Gaza, the West Bank, and Ukraine. KiwiSaver investments in companies providing weapons, surveillance technology, or other support connected to these conflicts rose 14 percent between March and September 2025, reaching $856 million, according to the report. Companies receiving increased investment during this period include IBM, Booking Holdings, Palantir Technologies, Motorola Solutions, and Caterpillar.
Beyond geopolitical conflicts, attention is also focusing on the practices of major technology companies. Concerns center around issues like surveillance, the spread of misinformation on social media, and the use of technology in conflict zones. Meta (formerly Facebook), Tesla, Thermo Fisher Scientific, and Palantir Technologies are among the companies identified as raising human rights concerns, according to Mindful Money.
The Challenge of Defining and Measuring “Harm”
While the demand for ethical investing is clear, implementing it presents significant challenges. Rupert Carlyon, founder of KiwiSaver manager Koura, argues that the list of companies to avoid is becoming “too high to be realistic.” He points to Caterpillar as an example, noting that while the company supplies machinery used in Israel – a point of concern for some – it also contributes positively in other parts of the world. “It’s also a company that does a huge amount of good in other parts of the world – it’s extremely hard to measure,” Carlyon said. He also emphasized that clients are primarily focused on investment returns and fees.
Carlyon suggested that individual consumer choices may be more impactful than divestment as an investor. “My very strong view is actually, if you really want to make a difference, then you’re going to make much more of an impact, if you don’t support them as a customer than as an investor,” he stated. He questioned the practicality of extending this logic across all areas of life, asking, “Airbnb… you’re going to stop investing in Airbnb, because you think Notice human rights issues? Does that mean that, you know what, we’re never going to use Airbnb ever again?”
Differing Approaches to Responsible Investing
Not all KiwiSaver providers are taking the same approach. John Berry, founder of Pathfinder Asset Management, said his funds actively avoid companies linked to human rights violations. “Based on the approach taken by Mindful Money, they are taking a values-based approach to human rights and other issues, and I think it’s entirely appropriate,” Berry said. “They disclose their methodology and the approach they’re taking, and they give the managers the opportunity to respond.”
Berry believes there are two key motivations for responsible investing. One is a values-based desire to align investments with personal ethics, while the other is the belief that companies with strong human rights records are more likely to deliver long-term financial returns due to increased trust and a stronger reputation. “I actually believe both those things are true,” he said. He emphasized the importance of investors and fund managers defining their own investment missions and priorities.
Barry Coates, founder of Mindful Money, maintains that avoiding problematic companies is more effective than attempting to influence their behavior. “These are major global corporations and New Zealand investors have only a small share of their capital,” Coates explained. “We see unlikely that fund managers sending letters or voting a few shares will change their practices. If companies are linked to human rights violations, fund providers should respect the wishes of their clients and avoid investing in them.”
What’s Next for Ethical KiwiSaver Investments?
The debate over ethical investing within the KiwiSaver framework is likely to continue. Mindful Money plans to regularly update its analysis of company exposure to human rights abuses, providing investors with ongoing information to inform their decisions. The organization is also advocating for greater transparency from KiwiSaver providers regarding their investment policies and holdings.
As of November 2023, the Financial Markets Authority (FMA) has set expectations for climate-related disclosures, but similar requirements for human rights disclosures are not yet in place. The FMA is currently reviewing its guidance on responsible investment, with potential updates expected in late 2024.
This ongoing scrutiny and evolving regulatory landscape will likely shape the future of ethical investing within New Zealand’s KiwiSaver system. Investors are encouraged to review their KiwiSaver provider’s policies and consider whether their investments align with their values.
Disclaimer: This article provides information about KiwiSaver and responsible investing for general knowledge purposes only and does not constitute financial advice. Investors should consult with a qualified financial advisor before making any investment decisions.
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