Responsible investment

Responsible investment, including environmental, social and governance (ESG) considerations, is taken into account in the investment policies and procedures of the Summer KiwiSaver scheme.

Responsible Investment Policy

Our Responsible Investment Policy forms part of the Summer Statement of Investment Policy and Objectives (SIPO), which can be found here.

The Summer Responsible Investment Policy is split into three parts.

1. Negative screening of investment products

Before Summer’s Investment Manager, Octagon Asset Management (Octagon), makes a direct investment in a financial product for a fund it will use screening tools provided by Sustainalytics, a leading independent ESG and corporate governance research, ratings and analytics firm, to identify whether the relevant entity derives revenue from any of the following activities:

• The manufacture of core weapon systems, or components/services of the core weapons system that are considered to be essential for the lethal use of controversial weapons. Controversial weapons include cluster munitions and anti-personnel mines; nuclear explosive devices (including the missiles that deliver nuclear warheads), chemical and biological weapons;
• The manufacture or sale of assault weapons to civilians;
• The production of tobacco products;
• The capture and processing of whale meat.

The screening they apply does not extend to the sale or distribution of these products. For example, they exclude tobacco manufacturers but not retailers who sell tobacco products e.g. supermarkets.

They publish the companies identified through their negative screening process on an exclusion list which will be available on this webpage. This list will be updated every six months.

2. Consideration of ESG factors

For directly held equities, listed property and fixed interest securities and cash and cash equivalents, Octagon uses its ESG Risk Assessment framework to help identify the material ESG risks and opportunities associated with our investments. This ESG Risk Assessment utilises data and research from various sources including Forsyth Barr’s Carbon and ESG (CESG) ratings and related methodology, Refinitiv (now LSEG) and Sustainalytics data, as well as information made available in the public domain i.e. news and media outlets

Octagon determines the extent to which these risks and opportunities are considered in its investment decision making. ESG factors may not be determinative of an investment decision and Octagon may invest in securities that have less favourable ESG ratings.

3. Controversies

From time to time unexpected information about the companies we invest in may become public. If Octagon determines further investigation is warranted they will convene the Investment Committee and apply the following steps to determine what response and actions, if any, should be undertaken.

• The Chair of the Investment Committee will direct Octagon’s ESG team to investigate further and present the information and its assessment to the Investment Committee;
• The Investment Committee will consider the information provided and determine whether the issuer’s activities are negatively flagged and / or inconsistent with a positive assessment under the assessment criteria of Octagon’s ESG Risk Assessment;
• The Investment Committee will determine an appropriate action which may be

1. 1. to note for internal reference only,
   2. to note and partially or fully sell the relevant financial products,
   3. to undertake (1) and advise investors via its website and / or via other media,
   4. to undertake (2) and update investors via its website and / or via other media

• If it is decided that a partial or full divestment is necessary, the investment will be sold in a reasonable timeframe, taking into account the particular circumstances, market conditions, and the duty to act in the best interest of investors.

A copy of the Octagon Investment Committee Charter, detailing all of the committee’s responsibilities and activities is available on the Octagon website. 

Investments into unrelated underlying funds

Before the Scheme invests into an underlying managed investment scheme that we do not directly manage, Octagon will consider the responsible investment framework for that scheme. Octagon will seek to invest in underlying schemes with responsible investment frameworks comparable to the Scheme, where it can do that without compromising the Scheme’s other investment objectives.

At the end of each quarter, Summer will make available on our website a list of any of the underlying scheme’s direct investments (as are available to the Investment Manager) that appear on the exclusions list as determined by Octagon’s negative screening activities.

As at 30 September 2024 the Summer KiwiSaver scheme had investments in the Hunter Global Fixed Interest Fund.

Hunter Global Fixed Interest is a fund offered by Harbour Asset Management. Harbour Asset Management as the Manager of the Hunter Global Fixed Interest Fund has appointed PIMCO Australia (PIMCO) as the fund’s Investment Manager.

At that date, the Hunter Global Fixed Interest Fund had financial exposures to entities associated with Airbus SE, Altria Group Inc., BAE Systems Plc, BAT International Finance Plc, The Boeing Company, Imperial Brands Finance Plc, Honeywell International Inc., Leonardo Sp.A, Lockheed Martin Corp., Northrop Grumman Systems Corp., and RTX Corp.; all companies that participated in activities prohibited by our negative screening process and that subsequently appear on our Exclusion list (available here).

The securities issued by the companies detailed above were not specifically targeted for investment by PIMCO but are the consequence of financial hedging activities undertaken by PIMCO when managing the credit risk (the risk of default) within the funds’ portfolios of investments.

*calculated as the net exposure (basis market value) of each Summer fund to the securities of companies on Octagon’s exclusion list.

Voting Policy

Summer will exercise its voting power in relation to any of the Scheme’s assets when we consider that it is in the best interests of investors to do so. Decisions as to whether and how to vote will be made on a case by case basis by Octagon. Octagon has contracted with Institutional Shareholder Services (ISS), the world's leading provider of corporate governance and responsible investment solutions to provide proxy research, voting and reporting.

Previous Responsible Investment Policy

This responsible investment policy updates and replaces the prior investment policy. Prior to 18 October, 2023 Summer made our responsible investment assessments based on the framework made available by the NZ Super Fund.

This is not a recommendation to buy or sell any financial product and does not take your personal circumstances into account.  We have prepared this web page in good faith based on information obtained from other sources, but we do not guarantee the accuracy of that information. We do not make any representation or warranty (express or implied) that this web page is accurate, complete, or current and to the maximum extent permitted by law disclaim any liability for loss which may be incurred by any person relying on this web page. We recommend you take financial advice before making investment decisions. We may update this page without notice.