Ethical investing case studies: What kind of ethical investor are you?

Our research into the Ethical Investment Journey identified different types of investors seeking ethical options.

“Being ethical was the cherry on top.”

Ethical investor type:  May as well be ethical, but don’t want to compromise on returns.

Martin is in his 50s and lives in a rural area with his wife and two children.  He uses a financial adviser. 

Martin and his wife meet with their financial adviser about once every two years to discuss the performance of their investments.  Their adviser suggested that Martin’s KiwiSaver was underperforming and recommended an ethical fund which showed strong returns.

Martin and his wife spent some time thinking about it and then signed up for the new provider.  Since purchasing, Martin feels the product has performed well. He checks in on it about every month or so and can ask his adviser if he has any questions.

“You get a good return but no one is getting shafted, nothing bad [happens] with it, it just makes you feel better.  Ultimately what’s most important is the return but if two returns are the same and one’s ethical then we go ethical. If it was a slightly smaller return we may have weighed it up, but it was the stronger return, so it was a no brainer.”

You can read Martin’s full case study in the ESG Journey Research document (link). 

“I went straight to the fund’s website and saw right away that they don’t do tobacco or weapons, and that was my lightbulb moment.”

Ethical Investor type:  Investing aligns with personal values.

Lindy is 36 and works as a teacher of business and economics.  She wants the money she invests to reflect the values she holds. 

Lindy initially had a small amount of money invested with her bank, where she also had a mortgage.  Media coverage of bank behaviour encouraged her to consider if that was the right place for her money. 

“I didn’t have much money anyway, so I just paid the fee and let someone else make the decision for me. But the media kept shining a spotlight on it and I thought ‘I’m paying fees and supporting something that’s not ethical, against my values, so that’s when I got cold feet and started to look around.”

Her aim was to ensure any investments she held weren’t actively doing harm.   She asked friends for recommendations and then took a closer look.  She found headline information that touted their shared values, and the importance of what they don’t invest in and their charitable donations, which gave her comfort.  It was easy to switch. 

Since changing providers, Lindy hasn’t looked back. She sees it as a long-term investment and not something she needs to be engaging with on a regular basis, though she sees no harm in switching again in future if necessary, especially as she now knows how easy it can be.

Read more about Lindy’s journey in the full case study, available in the ESG Journey Research document (link). 

“I feel like I’m helping to somehow help speed up the process of fixing issues if I’m investing in things that have a goal of improving the world.”

Ethical Investor type:  Wants to make a positive impact

Rachel and her partner are investing to prepare for their future, and believe their investments should be doing more than simply growing, but actively contributing to positive change. 

Rachel and her husband are keen investors, having learned the basics from the Barefoot Investor and by experimenting on share platforms.  They are looking to be in a position to retire early. 

But a “big KiwiSaver expose” in the media made Rachel realise she didn’t know what her money was being used for.  She started to source more information online.

She found an ethically aligned investment fund she liked the sound of – Pathfinder’s Global Water Fund.  The cause struck a chord and she felt confident the fund was going to work towards something positive as it also helped her own financial security. 

“I liked that it is managed here in Auckland, maybe by someone who is likeminded about these things. It made clear what they don’t invest in. The Product Disclosure was really informative, a good level of detail about what they invest in and why.”

For now, she views it as a long term investment, but she feels good in the knowledge that her investments are making a difference to improve others' lives as well as her finances.

Read more about Rachel and her husband’s journey in the full case study, available in the ESG Journey Research document. 

Photographs are for illustrative purposes only and names have been changed for privacy. The stories are provided for general information and is not an endorsement of any particular provider or investment. If you’re looking for help with your particular situation, you can contact your investment provider or a licensed financial advice provider. 

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