Pie and ESG

Pie is integrating Environmental, Social and Governance (ESG) matters into our investment process because we believe ESG risks and opportunities affect the risk and return of investments.

We have developed an ESG Policy for deciding how we do this.

At present, the policy applies to the Pie Climate Friendly Fund. But we will progressively adopt it across all Pie Funds.

Our ESG Policy

Our ESG policy means that we have an ESG committee comprised of people from across all Pie teams. The committee has 50% women members, as a minimum.

The committee has input into how ESG matters are identified, researched and monitored in Pie’s investment process.

The ESG Committee has also agreed on what Pie will not directly invest in (our ‘exclusions’). The exclusions are part of the ESG Policy and, like the Policy, apply initially to Climate Friendly and will be progressively adopted by all Pie Funds. We have reviewed all Pie Funds, however, and none of them have direct investments contrary to our exclusions.

Click here to read the policy.

Our Exclusions

Our investors need to understand the activities we have excluded and where we have drawn the line (typically, they are confined to direct involvement such as manufacture). We have provided the necessary detail for each exclusion in this section.

tobacco

Tobacco

We exclude companies responsible for product development, manufacture, branding and sales of tobacco products. We do not exclude retailers or companies with indirect involvement, such as equipment or packaging suppliers.

This exclusion is based on New Zealand’s international commitments, such as the Framework Convention on Tobacco Control, and the ever- strengthening public stance globally and in New Zealand on controlling tobacco.

gambling

Gambling

We exclude companies offering gambling, including online gambling such as poker, sports or lottery betting. We do not exclude companies with indirect involvement, such as equipment supplier.

This exclusion is based on Pie’s decision that we do not want to support gambling.

firearms

Firearms

We exclude companies that manufacture firearms. We do not exclude retailers or suppliers.

This exclusion is based on Pie’s decision that we do not want to support firearms manufacture, particularly of automatic weapons for civilian use.

munitions

Cluster Munitions And Anti-Personnel Mines

We exclude companies that manufacture either type of munition. It does not include companies that supply components or other goods and services to manufacturers.

This exclusion is based on international law and the Cluster Munitions Convention signed by New Zealand.

nuclear

Nuclear Explosive Devices (NEDs)

We exclude companies that manufacture and are involved in simulated testing of NEDs. We do not exclude companies that manufacture related products such as control and delivery systems; or products that carry nuclear weapons (such as aircraft and submarines).

This exclusion is based on the Nuclear Non-Proliferation Treaty signed by New Zealand, and New Zealand’s broader stance on nuclear testing.

Carbon Risk

The Climate Friendly Fund prioritises investments in companies and exchange- traded funds with lower carbon risk. Meaning, companies with lower carbon emissions and fossil fuel reserves. This ‘screen’ is in addition to the exclusions in the ESG Policy.

Our preference will be companies that are well prepared for a low carbon economy, where emissions harmful to our climate are limited, taxed, or both. Companies can be well prepared because their activities:

  1. Actively reduce or prevent emissions (e.g. windfarms);
  2. Do not produce significant emissions (e.g. financial services companies);
  3. Produce significant emissions, but it is clear they can and will adapt to conditions where this is very expensive or impossible (e.g. oil and gas companies with growing clean energy operations).