Photo by Mohammed Al Bardawil on Unsplash
Kiwis are increasingly facing a tough question: Are my retirement savings helping fund conflict and human rights violations in Gaza? Recent revelations about KiwiSaver investments in companies linked to Israeli settlements and the Gaza conflict have sparked a heated debate about the ethical implications of such financial decisions.
Why You Should be Concerned About KiwiSaver Investments Funding Israeli Settlements
The United Nations High Court stated last month that Israeli settlements in the West Bank are illegal under international law, a stance supported by numerous human rights organisations and reflected by general New Zealand public sentiment, as shown by recent polls. These settlements are built on land occupied by Israel since the 1967 Six-Day War, and their existence is the apotheosis of contention in the Israeli-Palestinian conflict. Investing in companies that support or profit from these settlements is, therefore, seen by the UN as complicit in perpetuating an ongoing violation of international law and human rights.
Data from ethical investment charity Mindful Money has brought to light the troubling fact that KiwiSaver funds have increased their investments in companies supporting these settlements by 20%. This trend raises serious ethical questions, especially given the strong public sentiment in New Zealand against such investments, shown clearly by the over 11,000 New Zealanders who have checked their KiwiSaver investments using Mindful Money’s tools in the past two weeks, reflecting a growing awareness and concern about where their money is being funnelled.
Weapons Investments and the Gaza Conflict
The Gaza conflict has led to widespread devastation – at least 40,099 Palestinians have been killed, and 92,609 have been injured since the conflict began on October 7, 2023 — weapons, of course, play a central role. The involvement of KiwiSaver funds in this conflict has come under scrutiny, particularly with reports that around $60 million of New Zealanders’ retirement savings are invested in global weapons manufacturers, such as:
- Lockheed Martin: Known for manufacturing fighter jets used by Israel in Gaza. The share price of Lockheed Martin has increased significantly since October 2023.
- RTX (formerly Raytheon Technologies): Another major U.S. manufacturer whose share price has also risen. RTX is involved in the production of various military technologies.
- BAE Systems: This company has been linked to the supply of mobile artillery systems, which have allegedly been used to fire shells containing white phosphorus into Gaza.
- Boeing: Known as a major supplier of weapons, including those used in military conflicts.
Barry Coates, the founder of Mindful Money, emphasises that most KiwiSaver investors are unaware of where their money is being invested. This lack of transparency is troubling, given that investments in companies profiting from the conflict in Gaza contradict the ethical values of many New Zealanders, as shown by a poll conducted by Tablot Mills in November last year. Coates argues that people should be fully informed about the consequences of their investments, which extend beyond financial returns to issues of human rights, environmental impact, and social harm.
The Scope of the Issue
The scale of KiwiSaver’s involvement in controversial investments is significant. As of March 2023, 367 out of 800 KiwiSaver-managed funds were found to be invested in companies that either support Israeli settlements or are involved in the global arms trade. These investments total $122 million, a staggering amount that underscores the need for greater scrutiny and action.
Is my investment being used to fund conflict in the Middle East?
Mindful Money has provided tools to help investors check whether their KiwiSaver funds are invested in such companies. This transparency is crucial for those who wish to align their investments with their ethical values. Moreover, ethical funds like those offered by Pathfinder provide a viable alternative for investors who want to avoid supporting industries linked to conflict and human rights abuses.
The Broader Context and Future Implications
The KiwiSaver controversy is part of a larger global movement towards ethical and responsible investing. As more people become aware of the impact of their investments, the demand for financial products that prioritise ethics over profit is likely to grow. This trend is already influencing consumer choices in New Zealand, with many investors opting for funds that exclude industries like weapons, fossil fuels, and tobacco.
Looking ahead, there is potential for policy changes that could further regulate KiwiSaver investments. This could include more stringent reporting requirements and ethical standards to ensure that funds align with the values of the New Zealand public. Public pressure will play a key role in driving these changes as more people demand transparency and accountability from their KiwiSaver providers.
Surveys consistently show that the vast majority of New Zealanders want to avoid investments in industries associated with human rights violations, weapons, and other socially harmful activities. As these values increasingly shape investment trends, financial institutions will need to adapt to meet their clients’ ethical expectations.