New Zealand Super divests

December 15, 2012 by J-Wire Staff
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The New Zealand Superannuation Fund has announced that it has excluded three Israeli  companies from its $20 billion investment portfolio on responsible investment grounds.

The excluded companies are:

Africa Israel Investments and subsidiary Danya Cebus
Africa Israel and its subsidiary Danya Cebus have been excluded because of their involvement in the construction of Israeli settlements in the Occupied Palestinian Territories. The settlements have been cited as illegal under international law, and the Fund considers the companies’ involvement to be inconsistent with the United Nations Global Compact.
Investment NZ$9,744
Elbit Systems Limited
Elbit has been excluded because of its involvement in the construction of the Separation Barrier in the Occupied Palestinian Territories. The Separation Barrier has been cited as illegal under international law, and the Fund considers the company’s involvement to be inconsistent with the United Nations Global Compact
Investment NIL

Elbit Systems Limited was deleted from the MSCI indices in June and subsequently dropped out of the Fund’s segregated investment portfolio. Excluding it will ensure it does not re-enter the portfolio in the future, should its market capitalisation change. At 30 June 2012 the Fund’s holdings in Elbit were worth $36,532.
Shikun & Binui
Shikun & Binui has been excluded because of its involvement in the construction of Israeli settlements in the Occupied Palestinian Territories. The settlements have been cited as illegal under international law, and the Fund considers the company’s involvement to be inconsistent with the United Nations Global Compact.
Investment NZ$19,898

Screen-Shot-2012-12-15-at-5.28.01-AMFindings by the United Nations that the Separation Barrier and settlement activities were illegal under international law were central to the Fund’s decision to exclude the companies, said Manager, Responsible Investment Anne-Maree O’Connor.
The Fund also factored in votes by New Zealand for UN Security Council resolutions demanding the cessation and dismantling of the Separation Barrier, and the cessation of Israeli settlement activities in the Occupied Palestinian Territories.
The Fund also viewed the companies’ activities to be inconsistent with the UN Global Compact, the key benchmark against which the Fund measures corporate behaviour.
“In deciding whether a company is breaching the Fund’s responsible investment standards and how material that breach is, we take account of the proximity and importance of the company’s actions to an illegal or unethical activity,” said Ms O’Connor.
“We draw a distinction between being directly and materially involved in an activity versus being a supplier of materials or services in the normal course of business. In doing so, we consider whether the product or service is integral to the activity and tailor-made as opposed to being an off-the-shelf substitute or readily replaceable alternative.”
“We also consider whether engagement by the Fund with the company concerned would realistically lead to a meaningful change in behaviour. In the case of these companies we have come to the conclusion that engagement is not likely to be effective.”
Ms O’Connor said the exclusion decisions were based on an ongoing research and screening programme and, in the case of Elbit Systems Ltd, engagement with the company over an extended period. The stocks have now been sold.
All three stocks were held passively in the Fund’s global equity portfolio, which is managed externally and includes shares in more than 6,500 companies around the world. Like many institutional investors, a sizeable proportion of the Fund’s investment portfolio tracks global equity indices (including the MSCI large-cap equity index, MSCI emerging market index and MSCI small-cap index) in order to gain cost-effective, diversified exposure to share markets around the world. 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 daily for compliance with Fund exclusions.

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.

Comments

12 Responses to “New Zealand Super divests”
  1. Trent says:

    Dorothy, you make a highly disturbing analogy.

  2. Gedalia says:

    Thank God I live in Australia where I have the freedom to direct my own Superannuation into investments, such as Israeli ventures, that are returning great dividends. As opposed to NZ whose economy is being suffocated by the welfare state and the retired popultations dependency on the Government to fund their pension.

    Israel does not need New Zealands politically stained superannuation funds. But New Zealand sure needs Israel’s technology, innovation, and life saving discoveries. Which of course can only be developed within secure borders, made possible by the separation fence.

    So much for responsible investment. The NZ Government can enjoy their diminishing returns, and here’s hoping that neither Israel or Australia bails them out when their economy completely capitulates.

  3. marty says:

    Well i think that is how it runs..

    http://www.hesta.com.au/

  4. Joel says:

    Elbit is highly ranked amongst its peers as a stock on Nasdaq ( Bloomberg)
    Security must be the primary consideration for any investment, particularly when it concerns Government funding of retirees.
    Elbit is an integral part of Australia’s defense, to the tune of many millions of dollars. A recent contract for Battle Management Systems for the ADF was worth in the vicinity of AUD$330M.(Defense Industry Daily, 16 March 2010) Is it possible that NZ could also be a beneficiary of Elbit technology?

    Joel

  5. Henry says:

    It’s easy for the Kiwi’s, as their separation barrier is isolation and an ocean. Walk a mile in someone elses shoes Kiwi’s and then we’ll have a chat. I’m glad be bowled underarm!

  6. Dorothy says:

    It saddens me that NZ has begun to turn her back on her long time friend, Israel. They do not understand that it is not against Israel but also against the G-d of Israel . It is interesting that the many road deaths, earthquakes, tornadoes and other national damage that has occurs since NZ voted against Israel.
    I have many Palestinian friends and know many in Jerusalem who are very happy they are under Israeli government, who have chosen Israeli IDs. Joel 3v3.. G-d says He judges those who divide up His Land and sadly NZ and Australia have just done that in their vote.

  7. Liat Nagar says:

    Well, little do they know what they do, the New Zealanders! Apart from anything else, objecting to building of the ‘Separation Barrier”, United Nations opinions not withstanding or otherwise, is tantamount to saying “bring on the suicide bombers”. Also, relying too heavily on United Nations opinions would make good, solid decision-making here nigh impossible.

    And, Ben, the tide had turned against Israel long before the UN vote – what’s new? The world is becoming increasingly full of non-thinkers and real intelligence more and more rare.

  8. Yosi says:

    Sheer Hypocrisy

  9. Ben Eleijah says:

    After the UN vote the tide has turned on Israel. Israel’s chief supporter is weakned and that shows even in the Australian abstinence in the UN vote.

    • Shirlee. says:

      Ben – Be serious for once for Gd’s sake.

      The whole country know what happens. They want the Muslim vote.

      • David says:

        In our inconsequential corner of the world, governments of Australia and New New Zealand have said that they are no longer friends of Israel. Only Canada remains a friend on principle, all other supporters have an economic agenda.

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