Ethical Investing - Socially Conscious Investments - Simplicity

We invest with a conscience

We're committed to investing responsibly. As a primarily passive index investor, we use a negative screening approach which excludes investment in companies or industries which we think may have wider negative effects on the environment or society. We implement this approach using ESG screened indices for our global portfolios and applying equivalent rules to our directly managed portfolios.

We think it's important to be transparent about what we don't invest in so our members can decide whether our approach aligns with their values. The following is a summary of the investment exclusions applied to our share portfolios. For more information on how policy exclusions are implemented in different investment portfolios, including descriptions of excluded business activities and revenue thresholds that apply, please refer to our Responsible Investment Policy.

We don't invest in

Adult entertainment

Companies that earn significant revenue* from producing adult entertainment, owning / operating adult entertainment establishments, or distributing adult entertainment materials.

Alcohol

Companies that earn significant revenue* from manufacturing or distribution and / or retail sale of alcoholic beverages, or supplying alcohol-related products / services to manufacturers.

Cannabis

Companies earning significant revenue* from development and/or cultivation of medical cannabis or cannabis for recreational purposes, or distribution and/or retail sale of medical cannabis or cannabis for recreational purposes.

Civilian Firearms

All companies that earn revenue from the production, distribution and sale of assault weapons or small arms, including associated components, to civilian customers.

Controversial weapons

Companies that have any involvement in controversial core weapons systems (including biological or chemical weapons, cluster munitions, and landmines) or components and services related to these core weapons systems, whether tailor-made, and non-tailor made.

Fossil fuels

Companies that earn significant revenue* from production of fossil fuels (thermal coal, oil, or gas) or from providing supporting products or services to fossil fuel producers, and overseas companies that earn significant revenue* from electricity generation from fossil fuels.

Gambling and casinos

Companies that earn significant revenue* from owning or operating a gambling establishment, the manufacture of specialised equipment for gambling, or providing supporting products / services to gambling operations.

Military Weapons

Companies that earn significant revenue* from the manufacturing of military weapons systems, components of these weapons, or tailor-made components of these weapons. All companies that have any involvement in controversial core weapon systems or associated components and services are excluded.

Nuclear Power

Companies that generate significant revenue* from the production of nuclear power.

Tobacco

All companies that earn significant revenue* from the manufacturing of tobacco products, involvement in distribution and/or retail sale of tobacco products, or supplying tobacco related products or services to manufacturers.

Or companies deemed to be non-compliant with UN Global Compact principles

Human rights

Principles 1 and 2: – Businesses should support human rights, and not be complicit with human rights abuses.

Labour

Principles 3, 4, 5 and 6: Businesses should uphold freedom of labour association, recognise the right to collective bargaining, and work to eliminate employment and occupation discrimination, forced labour, and child labour.

Environment

Principles 7, 8 and 9: Businesses should promote greater environmental responsibility, and encourage development of environmentally friendly technologies.

Anti corruption

Principle 10: Businesses should work against corruption in all its forms, including extortion and bribery.

*Significant revenue is 5% or more of reported total annual revenue. Industry classifications and descriptions of business involvement used for responsible investment screening by Simplicity and our third-party investment managers are applied in accordance with our Responsible Investment Policy. Investment screening for our international investments is implemented via the Bloomberg DM Ex NZ ESG Screened Index Methodology and the Bloomberg MSCI Global Aggregate Sustainability Select SRI Float Adjusted Index, which meet or exceed our policy requirements. ESG screening limitations apply to the Bloomberg MSCI Global Aggregate Sustainability Select SRI Float Adjusted Index due to the nature of and availability of ESG ratings and screening data for certain types of issuers and securities included in the index - a summary of ESG screening coverage for this index is provided in the Bloomberg MSCI Global Aggregate Sustainability Select SRI Float Adjusted Index - ESG screening coverage matrix (March 2024).