Is Your KiwiSaver Truly Ethical? ft. Pathfinder CEO John Berry

Ethical investing goes beyond steering clear of controversial sectors like fossil fuels or tobacco. For Pathfinder, the process includes a deep dive into how companies operate—how they treat their staff, their supply chains, environmental impacts, and corporate governance. It’s about identifying investments that align with a vision for a better world: one that considers people, planet, and animals.

But there’s no one-size-fits-all. With over 11,000 members, Pathfinder knows that everyone’s definition of “ethical” varies. Their approach? Focus on a future they want to create, then invest in companies that reflect that vision.

Ethical investing is full of grey areas. Take gambling, for example: is it unethical to invest in a casino operator? What about the manufacturers of the machines used in those casinos? Or the tech companies that make the glass or electronics inside them? These nuanced decisions are made by Pathfinder’s ethics committee, guided by a long-term view and a focus on transparency.

Their consumer register lists companies they’ve reviewed and flags any potential issues. Occasionally, exceptions are made for companies driving transformative change, like one developing artificial skin—a product that could revolutionise healthcare.

One of the biggest myths in investing is that ethical means less profitable. According to Berry, the opposite is often true. Companies with strong leadership and social responsibility tend to be more stable, with lower staff turnover and stronger productivity. Pathfinder’s own mission is to “generate individual wealth and collective well-being”—a dual focus on returns and impact.

And the data backs it up. Ethical funds can and do perform just as well as conventional ones, with research from Morningstar and other financial bodies showing competitive returns.

The rise in popularity of ethical investing has led to concerns about greenwashing—when companies overstate their ethical credentials. In New Zealand, the FMA (Financial Markets Authority) plays a role in ensuring providers don’t mislead consumers. But with no standard definitions, consumers are encouraged to do their own due diligence.

Berry recommends starting with your provider’s website—check for an ethical investment policy and full list of holdings. Mindful Money and the Responsible Investment Association of Australasia are also great resources.

Pathfinder backs local innovation. From Lodestone Energy’s solar farms to social housing funds and mental health services, they invest in real-world solutions that also offer a return. When issues arise—like discovering a bank has exposure to the coal industry—they’re not afraid to divest.

Smaller private companies, where they can engage directly with founders and leadership teams, offer even greater opportunities for impact. Sometimes, these conversations even lead to change, like encouraging a food producer to factor climate change into their strategy.

AI is the next frontier. Pathfinder is already thinking about the ethical implications of investing in AI—from its use in weapons systems to its massive energy consumption. While the tech evolves quickly, the same principles apply: transparency, responsibility, and impact.

KiwiSaver isn’t just about growing your nest egg—it’s also a tool for shaping the future. With over $115 billion in KiwiSaver funds, there’s an opportunity to drive infrastructure development and innovation locally. But Berry is clear: those investments still need to deliver returns.

He believes we need a long-term plan to raise contribution rates (currently just 3% in NZ, compared to over 10% in Australia) and to create investable infrastructure opportunities that benefit both the country and its savers.

• Ethical investing is subjective, but Pathfinder defines it based on a long-term vision of a better world.

• Avoiding greenwashing requires checking your provider’s policies, holdings, and transparency.

• Returns don’t have to suffer—ethical investments often perform just as well, if not better.

• Engagement and transparency are key, especially with private companies and emerging technologies like AI.

• KiwiSaver has huge untapped potential to support ethical outcomes and national infrastructure—if approached strategically.

The Pathfinder KiwiSaver plan is all about doing things differently. They seek to exclude certain activities like fossil fuel extractions, weapons manufacturing and vapes.

Pathfinder’s KiwiSaver plan has won Mindful Money’s Best Ethical KiwiSaver award for years.

When it comes to returns, Pathfinder KiwiSaver Funds have frequently outperformed the benchmark – You can learn more about Pathfinder and their Funds performance on their website 

Here’s how to take action today:

• Visit pathfinder.kiwi – read Pathfinder’s Ethical Investment Policy and explore how your money can drive change.

• Use tools like mindfulmoney.nz to see what your current KiwiSaver is funding — and how it compares.

If you’d like to learn more, check out these other episodes below.

Pathfinder Asset Management Limited is the issuer of the Pathfinder KiwiSaver Plan
and Pathfinder Investment Funds. Product Disclosure Statements for the offers are
available at pathfinder.kiwi. Learn more about how they invest ethically by reading
their Ethical Investment Policy on the website www.pathfinder.kiwi