ACC ethical investment policy works as intended
ACC has not invested money in the development or production of cluster munitions, nor have we breached the Cluster Munitions Prohibition Act 2009.
ACC has not invested directly in any company on our investment exclusion list, nor have we invested through any collective investment vehicle with the intention or knowledge that money would be invested in any company on our investment exclusion list.
In December 2015 we identified that a collective investment vehicle managed by Orbis Investment Management, had purchased shares in Lockheed Martin, amongst other companies. Lockheed Martin is on our ethical exclusion list. The shares were purchased through the secondary market meaning the money from the pooled fund that Orbis used to pay for the shares would have gone to the previous owner of the shares and not Lockheed Martin, who also confirmed that they no longer produce cluster munitions. We also know that Orbis has holdings in four other companies on our direct exclusion list. And after discussing our concerns about this with Orbis, it has agreed to set up a separate pooled fund consistent with ACC’s Ethical Investment Policy. ACC expects this fund to be operational by December 2016.
We take our responsibility to consider the ethical implication of our investments very seriously, and have always acted lawfully.
ACC has recently strengthened its ethical investment policy governing the processes for investing via collective investment vehicles. We are confident the recent change in the ethical investment policy addresses our responsibilities.
New Zealanders can have confidence that ACC is committed to ethical investing practices, and that our ethical investing policy works as intended.
Why ACC Invests
ACC invests funds to meet the future costs of injuries that have already occurred, without the need for New Zealanders to pay more levies for these claims in the future.
Each year ACC collects levies that cover the ‘lifetime’ costs of the injuries that happen in that year. Some injuries require ongoing rehabilitation, medical or earnings replacement costs many years after they occur. And in some cases the injured person may never fully recover and will need daily help for the rest of their lives.
Money collected in levies is invested by ACC’s in-house investment team and external funds managers (appointed by ACC) in local and global markets, over a range of asset classes such as shares, bonds and property.
ACC is one of New Zealand’s largest investment fund managers and our success as a fund manager is important because there is always a gap between the present and future cost of injuries, and the amount of money collected in levies.
Ways in which we invest
ACC’s preference is to invest directly, or use external fund managers to invest on our behalf, within guidelines dictated by ACC. A relatively small proportion (less than 3.5%) of the ACC fund is invested via other investment routes such as collective investment vehicles. These routes widen the choice of investment options and are a cost effective means of investing, allowing ACC to participate in high-performing investment funds. Investment routes such as collective investment vehicles involve multiple investors and different investment strategies. The investors have no say in what the fund manager invests in, and indeed will have limited knowledge of what the fund manager has invested in.
ACC’s Ethical Investment Policy
As well as achieving a good return on investment, ACC also seeks to invest in an ethical manner. ACC avoids directly investing in activities that it believes would be regarded as unethical by a substantial majority of the New Zealand public. ACC takes the laws of New Zealand to be a reflection of those principles that are widely held by the New Zealand public. For that reason, ACC seeks to avoid investing in entities that engage in activities that would be illegal if they occurred in New Zealand. ACC is a signatory to the United Nations Principles for Responsible Investment.