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The New Zealand Superannuation Fund today announced that it had excluded four companies from its $19 billion investment portfolio, following a review of engagement priorities.

The companies were excluded for severe breaches of the Fund’s responsible investment standards where engagement was unlikely to be effective due to the context of the company’s operations or to a lack of responsiveness from the company to the issue.

Excluded CompanyCriteriaHoldings as at 30 June 2012

Freeport-McMoRan Copper & Gold  Inc.

Freeport-McMoRan has been excluded based on breaches of human rights standards by security forces around the Grasberg mine, and concerns over requirements for direct payments to government security forces by the company in at least two countries in which it operates. Despite improvements in Freeport McMoRan’s own human rights policies, breaches of standards by government security forces are beyond the company’s control. This limits the effectiveness of further engagement with the company.



KBR (formerly Kellogg Brown & Root) has been excluded following severe breaches of anti-bribery and corruption standards over a long period of time and on-going concerns relating to employee safety. The Fund considers that engagement with the company is unlikely to be effective due to on-going litigation and the company’s limited responsiveness in the past.


Tokyo Electric Power Company

TEPCO has been excluded based on a long history of breaches of environmental and safety standards prior to and including the Fukushima nuclear plant crisis. In 2012 Japan’s National Investigative Committee criticised TEPCO’s performance and its continued reluctance to learn from mistakes.


Zijin Mining Group

The Zijin Mining Group has been excluded following severe breaches of environmental and safety standards including toxic spills and emissions, and a tailings dam collapse which led to multiple fatalities. In 2010 Chinese regulators prosecuted the company and criticised its slow response to improving systems despite earlier warnings. The company faced multiple lawsuits in China.


The Fund said the exclusion decisions were based on information from its specialist screening agency Morgan Stanley Capital International (MSCI), which identifies where companies breach global standards of good corporate behaviour such as the UN Global Compact, and reviews how companies respond to these breaches. The Fund also draws on information from other sources including similar funds overseas.

“In making a decision to exclude a company from our portfolio, one of the tests we apply is whether engagement with the company might realistically lead to sufficient improvements. We have come to the conclusion that further engagement by the Fund with these companies is not likely to be effective. We would rather focus our efforts on companies where we believe we can make a difference.”

The Fund’s responsible investment standards are set out in its responsible investment framework, available on Under this framework the United Nations Global Compact is the key benchmark against which the Fund measures corporate behaviour.

The Fund also excludes companies that are directly involved in the manufacture of cluster munitions; in the manufacture or testing of nuclear explosive devices; in the manufacture of anti-personnel mines; in the manufacture of tobacco, and in the processing of whale meat.

The Fund’s global equity portfolio, which is managed externally, includes shares in more than 6,500 companies around the world, and tracks global equity indices including the MSCI large-cap equity index, the MSCI emerging market index and the MSCI small-cap index. Investments in these companies move in and out of the Fund primarily according to their market capitalisation rather than through active stock picking. The portfolio is monitored for compliance with exclusions applied to the Fund on a daily basis.


For more information:

Catherine Etheredge, Head of Communications, [email protected], Ph 64 9 366 4905, Mob 64 9 27 4777 501

About the New Zealand Superannuation Fund

The New Zealand Superannuation Fund invests money, on behalf of the New Zealand Government, to partially pre-fund future universal superannuation payments. The Fund is a founding signatory of the United Nations’ Principles for Responsible Investment (UNPRI). It is also a member of the Investor Group on Climate Change Australia/New Zealand, the International Corporate Governance Network and the Responsible Investment Association Australasia.

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