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Investor’s approach to ethical and sustainable work practices
Where you put your money can make a difference to how workers are treated. Find information about ethical and sustainable work practices and why they matter to you.
Many investors today want to know that their money is going into companies that do not contribute to harm. They increasingly want businesses to treat workers fairly and ethically — not just their own workers but also those working in their supply chains and other organisations they engage with.
When you choose to invest in companies with ethical and sustainable work practices, you’re supporting good and fair treatment of workers (‘ethical and sustainable work practices’ means treating workers lawfully and in a fair and decent way that can be maintained over time).
Avoiding organisations with poor work practices moves money away from companies with unsafe or unfair conditions that harm and exploit workers.
Find out more about ethical and sustainable work practices:
About ethical and sustainable work practices
Choosing investments based on values about how workers’ labour rights are respected is part of what’s known as ‘responsible’ or ‘ethical’ investment.
What is responsible or ethical investment?
According to Principles for Responsible Investment (PRI), responsible investment involves considering environmental, social and governance (ESG) issues, alongside financial performance, when making investment decisions.
For example, it could mean looking at:
- how a company treats their workers, suppliers and other stakeholders
- if a company pays fair wages and supports inclusion and diversity
- how a company makes sure their supply chain does not exploit workers or contribute to slavery-like conditions.
An introduction to responsible investment – PRI(external link)
The six principles for responsible investment
PRI’s Six Principles for Responsible Investment show how you can consider ESG issues when investing. For example, the principles state that investors will actively find out about ESG issues when making decisions. Find out more, including actions you could take:
What is responsible investment? – Principles for Responsible Investment(external link)
Why ethical work practices matter to investors
Investing ethically isn’t just the right thing to do. You can be directly linked to human rights risks through the business activities of the companies you invest in. The UN Guiding Principles on Business and Human Rights, and recently updated OECD Guidelines for Multinational Enterprises, established that all companies, including investors, have a responsibility to respect human rights throughout their operations, business relationships and value chains (including supply chains).
Investor Responsibility – Investor Alliance for Human Rights(external link)
Where there are risks to people there are also risks to business. Organisations with ethical and sustainable work practices are more likely to last — so your investment is more likely to last, too. These organisations are more likely to stay on the right side of the law and less likely to be fined or penalised. That means they will have more time, money and resources to grow the organisation. Investing in an organisation that does the right thing could also mean you receive more dividends.
Does ethical investment earn good financial returns? – Mindful Money(external link)
The ‘Voices of Aotearoa: Demand for Ethical Investment in New Zealand’ 2025 survey, from Responsible Investment Association Australasia and Mindful Money, found that:
- 75% of New Zealanders want their KiwiSaver or managed fund to be invested ethically and responsibly
- investors prioritise avoiding companies that violate human rights (91%), abuse labour rights (91%), and damage the environment (89%)
- 76% would invest in a fund that creates positive benefits for society and the environment, with 60% seeking comparable returns and 16% willing to accept lower returns.
Voices of Aotearoa: Demand for Ethical Investment in New Zealand 2025 — Mindful Money(external link)
Taking action as an investor
All kinds of investors can be responsible investors. You could be:
- an active investor: an institutional investor like a fund manager, or an individual choosing your own investments
- someone looking to invest through a managed fund (a managed fund is an investment product where money from many investors is pooled together and managed by an investment manager)
- someone deciding which KiwiSaver or other superannuation fund to invest in.
You could put money into a business, property, commodity, currency or something else.
What is Responsible Investment? — Responsible investment Association Australasia(external link)
Below, we’ve suggested things you can do, and questions you can ask, to make sure your investment promotes ethical and sustainable work practices.
If you’re an active investor
As an investor, or an agent for an investor like a financial advisor, make sure your new and existing investments are with organisations that treat workers fairly.
This means researching the organisation and asking not only about their work practices, but also about their supply chains and business relationships, for example, franchisees.
Start by asking the organisation for information and checking their annual report and website. Here are some questions you could ask.
You can ask: Do you have a code of conduct or policy about human and labour rights? Does it include compliance with employment standards?
The answer should tell you how the code or policy is implemented. The organisation should provide the most recent example of their document.
You can ask: Do you do any corporate social responsibility reporting, including reporting on fair treatment of workers?
The answer should tell you how they report and monitor, for example, what areas they cover and how regularly.
You can ask: Do you commit to report any situations where you, or your supply chain, have breached employment standards or exploited workers?
In their answer, the organisation should include the most recent report if there is one. It could be a separate corporate social responsibility or sustainability report, or a section in their annual report.
You can ask: Do you have a supply chain map that shows where the greatest risks of poor treatment of workers are and how you will manage, mitigate and monitor those risks?
The answer should tell you what risks they have identified by mapping their supply chains and what they are doing to manage, mitigate and monitor the risks.
You can ask: Do you have an ‘employee-voice platform’ that gives workers, suppliers and customers a chance to provide feedback about their working conditions and how they’re being treated at work?
The answer should tell you how workers, suppliers and customers can give feedback on how they are treated. The organisation should also tell you how they remediate issues.
Is there a hotline or whistleblowing channel (separate to an employee-voice platform), which is available at any time to report serious employment issues like breaches of employment standards? Is there an internal escalation process and point of contact to report worker exploitation? The organisation should also tell you how they remediate issues.
You can ask: Do you hold a certification or accreditation that has robust employment rights criteria and is externally audited? Do you require your suppliers to hold one?
The answer should tell you:
- if they hold any accreditation or certification
- if the accreditation requires the organisation to do due diligence on their suppliers and contractors
- if the certification involves third-party audits and confidential employee interviews.
What you can do if you are a director
If you are a director of a company, you can also read our information for directors.
Director’s approach to assuring ethical and sustainable work practices
Find out more about ethical investment
The Investor Alliance for Human Rights is a membership-based, non-profit initiative focused on how investors can respect human rights, drive responsible business conduct, and push for robust business and human rights policies.
They have developed the Investor Toolkit, which provides institutional investors with ready-to-use guidance, practical tools, and illustrative case studies to support the implementation of their responsibility to respect human rights throughout the investment lifecycle:
Investor Toolkit on Human Rights — Investor Alliance for Human Rights(external link)
The Responsible Investment Association of Australasia is an industry member association that certifies responsible investment funds and supports its members on ESG issues. They have guidance and toolkits about ethical investment for investors, including fund managers, KiwiSaver providers, brokers, trusts, financial advisors and individuals.
Responsible Investment Association of Australasia(external link)
The Financial Markets Authority (FMA) has information about what to consider when making ethical investment decisions.
Ethical investing — Financial Markets Authority(external link)
If you’re choosing an ethical managed fund
If you want to invest ethically through a managed fund, you can get help from a financial advice provider, or look at online fund comparison tools, to find a fund that invests in companies which:
- treat their workers fairly
- have high ethical standards
- do not contribute to worker exploitation or harm.
Managers of these funds monitor their company investments for any evidence of modern slavery, which includes telling you how they’ll ensure any non-financial objectives are being achieved and what they’ll do if the company breaches their investing policy, for example, divesting funds (reducing the amount they invest in the company). Find out more from the Financial Markets Authority, including some useful tips on making ethical investment decisions:
Ethical investing — Financial Markets Authority(external link)
MoneyHub has an ‘Ethical investing guide’, which explores different options for managed funds, exchange-traded funds and KiwiSaver:
Ethical Investing — MoneyHub NZ(external link)
Mindful Money has information about investment funds that meet high ethical standards:
Responsible Investment — Mindful Money(external link)
If you’re choosing an ethical KiwiSaver
To make sure your KiwiSaver fund supports fair treatment of workers, you can choose from a growing number of KiwiSavers that:
- invest in companies with high ethical standards
- avoid companies which contribute to worker exploitation and harm.
Mindful Money has information about KiwiSaver funds that meet ethical standards. They have a fund-finder you can use to identify funds which avoid companies of concern and invest in companies with higher standards. Find out more:
Responsible Investment - Mindful Money(external link)
You can also read about choosing an ethical KiwiSaver fund here:
Ethical investing — Financial Markets Authority(external link)
‘Sorted’ have a tool to help you choose a KiwiSaver fund: