Insights
Climate change & your KiwiSaver

Let’s be honest—climate change can feel like the impossible problem. Addressing it seems to require personal sacrifice today (comfort, convenience, short-term profits) for the benefit of all and future generations. It’s big, it’s complicated, and it often feels out of our hands. But here’s the thing: doing nothing isn’t neutral. And choosing to act - however imperfectly - can be powerful.

At Pathfinder, we’ve never been afraid of hard things. We know your investments in KiwiSaver can create emissions, in fact last year there was an increase in KiwiSaver investment in fossil fuel extraction, production and use for electricity generation. But we are determined to shift the dial — finding investments that actively support emissions reduction and aligning our investing with the goals set out in the Paris Agreement. We want to give hope, for a more liveable, climate-resilient future while saving for people’s future and we thank you for taking this path with us.

The Paris Agreement is more than just a symbolic handshake between signatories. It’s a blueprint that asks countries—and by extension, companies and investors—to cut emissions, track their progress transparently, and strengthen their commitments over time. Think of it like a long-term team project, with the future of the planet as the final grade.

It was created in 2015, when nearly 200 countries signed a treaty to limit global warming to well below 2°C (and ideally under 1.5°C) compared to pre-industrial levels. Why? Because the science is clear: every tenth of a degree matters when it comes to avoiding the worst impacts of climate change.

This is the crossroads from which we are standing. Figure 1 shows where we’re headed based on three scenarios:

1. Current policies – what countries are doing.

2. Government pledge range – what they’ve said they might do.

3. Paris pledges & targets – the legally binding goals they’ve committed to.

Even under the most optimistic scenario, we’re still overshooting the critical 1.5°C limit. That’s sobering—and certainly not the outcome Pathfinder is driving for. Governments aren't doing enough based on scientific projections - the pledge range is still much higher than the ideal scenario, so it’s critical that business and consumers step up, and that is why your commitment to investing your KiwiSaver in a low-carbon emitting fund, really matters. It’s not just about the emissions you avoid—it’s about the signal you are sending, and the commitment you have made towards protecting a liveable future. Even if governments fall short, it doesn’t diminish the importance of striving for this temperature goal - it only makes individual and collective efforts more vital.

According to Mindful Money’s latest research (as at Feb 2025), there has been a surge of investment (a 20% increase) in some of the worst actors in the climate crisis. Those companies, including Exxon Mobil, Chevron, Shell and BP have been promising to transition to renewable energy for 30 years. Their promises have proven empty. The UN Secretary-General António Guterres has accused the fossil fuel industry of spending billions of dollars in deceiving the public.

Kiwis have a staggering $111.8 billion invested in KiwiSaver (as of 31 March 2024) and many don’t know what their money is being invested in. When we recognise KiwiSaver as a significant contributor to carbon emissions it becomes clear that choosing one that aligns with your ambition for the climate, is a material decision.

At Pathfinder, we take this responsibility seriously. We strive to select investments with lower-than-average emissions to drive down the overall emission profile of our investing. Across our entire portfolio, 53% of the listed-companies' shares we invest in are committed to Science Based Targets initiative (SBTi) – targets that helps companies align their emissions reduction pathways with the goals of the Paris Agreement. This means those companies are pushing toward real, measurable reduction emissions (see Figure 2). Just imagine if all that KiwiSaver capital - $111.8 billion and growing - was used to shift markets, drive change, and prove that prosperity and a healthy planet don’t have to be mutually exclusive.

Beyond carbon, there can be broader value derived from selecting companies who contribute to a climate-positive portfolio. These companies can be more likely to support decarbonisation, prioritise sustainable development and conduct themselves with authenticity and transparency. Nowadays, if you make a claim, you need to back it up or you’ll lose trust. We believe a company with good values and governance, that is transparent about what they are trying to achieve, is more likely to over perform economically in the long run.

Saving for your retirement doesn’t have to cost the future; we want our members to feel good about growing their wealth and excited for their post-work world.

We believe that despite operating in an imperfect world and inside an industry that often overlooks human rights, animal care or ecosystem protection; there’s no reason not to make the most ethical investment decisions possible.

Good returns and doing good things don’t have to be mutually exclusive. Let’s keep going. Let’s spread the word. Let’s do it for the future.

References:

Chapter 2: Our activities are driving emissions | Ministry for the Environment

Climate friendly KiwiSaver funds - Mindful Money

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Pathfinder Asset Management Limited is the issuer of the Pathfinder KiwiSaver Plan and Pathfinder Investment Funds. A Product Disclosure Statement for the offer is available at pathfinder.kiwi. Learn more about how we invest ethically by reading our Ethical Investment Policy, Exceptions Register and our Funds' performance on the website. Past performance should not be taken as an indication or guarantee of future performance, and Pathfinder makes no warranty or representation about future performance.

Photo by Roxanne Desgagnes, Unsplash