NZ Super Fund - Sustainable finance

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The Guardians has a developed a robust track record as a responsible investor over many years. We have a long-held belief that environmental, social and governance considerations, including climate change, are fundamental to long-term risk and return.

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Jo Townsend, Chief Executive

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A commitment to sustainable investment is a natural extension of the Guardians’ intergenerational mandate.

There is no point in building up a store of wealth for future generations if we create an unlivable environment, or if our investments are contributing to social harm to the very people we are working to support.

It all comes back to our mandate: to invest the Fund on a prudent, commercial basis in a manner consistent with best-practice portfolio management; maximising return without undue risk to the Fund as a whole and avoiding prejudice to New Zealand’s reputation as a responsible member of the world community.

Sustainable finance means two things.

One – environmental, social and governance risks to the Fund’s portfolio are taken into account. They are fundamental to long-term risk and return.

Two – the implications of the Fund’s investments for the environment and society are factored into our investment decisions – ultimately, whether to buy, sell or hold.

The Guardians’ Climate Change Investment Strategy is key. Climate change creates both investment risk – for example, that of stranded assets and regulatory intervention. But climate change can also create opportunity.

The Fund is on track to be net zero by 2050. Emissions intensity has been significantly reduced and exposure to fossil fuel reserves has essentially been removed – so far, without hurting financial returns.

The Fund is also upping its investments in companies that we believe will benefit from the transition to a low carbon economy.

In New Zealand and globally, we are also engaging with companies on climate change – because the Fund will only be able to reach net zero if the companies we invest in are successful in doing so themselves. We work in collaboration with other local and global investors to make sure our voice is as strong as possible.

The Guardians’ shift to a Sustainable Finance approach is just beginning. We have much to do. But we are absolutely clear that this work is key to our mission – it's written into our purpose: Sustainable investment delivering strong returns for all New Zealanders.

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Logo of NZ Super Fund, Te Kaitiaki Tahua Penihana Kaumātua o Aotearoa

Against a backdrop of changing stakeholder expectations and developing global practice the Guardians' Board has adopted a goal of sustainable finance. This reflects the evolution of responsible investment from a risk management approach, which focuses on the ESG risks to financial performance, towards wider considerations about the impact of investments on society and the environment.

Our sustainable finance goal is to incorporate sustainability considerations into investment decision-making and support the development of a sustainable financial system. This means that we:

incorporate or integrate ESG into investment decisions with the intention of advancing sustainability whilst fulfilling our financial purpose;
consider the impact of ESG in our investments and the impact of our investments on society and the environment;
work with others to overcome barriers to a sustainable financial system.

Sustainability is now at the heart of our organisational purpose: Sustainable investment delivering strong returns for all New Zealanders.

Sustainable investment refers to the investment activities that we carry out as an investor. Our sustainable finance goal is about the wider goal of achieving a sustainable financial system through policy engagement and sector leadership.

The Guardians has had a multifaceted climate change investment strategy in place since 2016. Designed to address climate change investment risks and opportunities over the long term, it remains a key element of our sustainable finance approach.

The United Nations backed Principles of Responsible Investment (PRI) remains our performance benchmark and best practice standard. The principles cover incorporation of ESG, active ownership, collaborating for change, disclosure and transparency.

We are committed to the active ownership and stewardship of our assets. This means using our influence as an asset owner or shareholder to encourage companies to improve how they manage and report on ESG risks and opportunities.

We supported the development of the Aotearoa New Zealand Stewardship Code and were a founding signatory. In 2024 we published our first standalone Stewardship Report alongside our Annual Report and Climate Change Report. The Stewardship Report sets out our approach to stewardship in detail and covers how we meet the requirements of the Stewardship Code.

View the Stewardship Report, Climate Change Report and Annual Report

We collaborate on responsible investment with other New Zealand Crown Financial Institutions: the Accident Compensation Corporation (ACC), the Government Superannuation Fund Authority and the National Provident Fund.

In addition to applying sustainable finance principles when making investment decisions, we aim to run the Guardians as an organisation in a way that demonstrates our commitment to sustainability and transparency.

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