Introducing Pathfinder: Growing Wealth Sustainably
Written: 08 06 2022
Author: Jono O'Grady
4 min read
When it comes to sustainability, there can sometimes be a gap between companies that talk the talk, and companies that walk the walk.
Pathfinder is an asset management company, based in Auckland New Zealand, that genuinely walks the walk where sustainability is concerned. They have a strong focus on curbing climate change and take an ESG-centric approach to investing, with independent sustainability certifications.
People often ask ‘If I invest ethically, can I make as much money?’ Pathfinder’s Creative Director Lily Richards responds:
“Making money and having good morals can feel contradictory - but it doesn’t have to be. Growing your wealth via investments that support things like renewable energy and address urgent needs like the water crisis, means you can generate personal wealth and contribute to global well-being.”
Pathfinder CEO John Berry also comments:
"Ethical investing does not come at a cost, in fact, we believe the opposite is true – accounting for environmental and social considerations should add to long-term financial returns.”
Pathfinder’s KiwiSaver recently joined the $100 million club in mid-2021, and it would appear that consumer sentiment echoes and supports this view.
Morningstar substantiates this positive investor activity, by ranking the Pathfinder Conservative fund #1 in its category over the 12 months leading up to June 30th 2021; and their other Balanced, Growth and Conservative funds all ranked in the top three of their respective Morningstar categories in 2021.
Awards and Accolades
In 2021, Pathfinder Asset Management dominated at the Mindful Money Awards. The Mindful Money Awards are independent awards for responsible and ethical investing in New Zealand. Pathfinder won the Most Ethical KiwiSaver provider and Best New Ethical fund and was also highly commended in the Best Ethical Retail Investment category. The awards speak for themselves – they recognise that Pathfinder is committed to providing consumers with choice when it comes to ethical and responsible investments.
Pathfinder’s Ethical Trans-Tasman fund was also selected in December 2021, as MoneyHub’s favourite fund for sustainable investing. MoneyHub commented:
“Pathfinder's ethical investing policy is at the heart of everything it does. It arguably applies the strictest test, excluding any company it considers 'unethical' or a poor investment opportunity. It also invests outside the sharemarket and has recently taken an equity stake in Sharesies. Pathfinder's intention is to invest in companies that are undervalued, have growth potential and do not harm society. While the fund is new, it is arguably one to watch in 2021 and beyond.”
You can find the Pathfinder Ethical Trans-Tasman fund available on Flint.
King of Exclusions
An area that Pathfinder dominates within the sustainability landscape, is in exclusions. Unlike some New Zealand fund providers, they specifically exclude against animal testing; and Mindful Money illustrates the Pathfinder suite of funds have a much broader range of exclusions applied, compared with some of the other socially responsible funds on the market. They’re also the only KiwiSaver provider to have all three of the Mindful Money badges (Animal Cruelty Free, Fossil Fuels Free and Weapons Free) on all three of their funds.
The Pathfinder product disclosure statement gives a thorough overview of their guiding principles. At Flint we particularly like the three rhyming values that underpin the ethos of Pathfinder: Aware, Fair, and Care:
“Aware, fair and care are our values as a business, and a lens we apply to our share investments. We take respect for human rights into account, which can include treatment of staff, customers, and suppliers. We also care about the treatment of animals and seek to avoid companies with high levels of controversy in their operations”.
Pathfinder is a member of Responsible Investment Association Australasia (RIAA), with several of the funds offered by Pathfinder RIAA certified funds. RIAA certification is a great way of demonstrating a commitment to responsible investing and can provide customers with assurance that investments have been independently verified as responsible. You can access Pathfinder’s Global Water Fund, a RIAA certified investment fund, on Flint. According to Mindful Money’s synopsis, the Pathfinder Global Water fund specialises ‘in investing in listed water companies. This covers a wide range of activities including water utilities filtration monitoring technology and the manufacture of pumps pipes and irrigation equipment’. The Fund targets a portfolio of 50 to 100 water companies.
How Pathfinder does business
Certifications and awards are great, but how does Pathfinder conduct business? A noteworthy aspect of Pathfinder is its commitment to social change and its willingness to support it.
20% of KiwiSaver management fees are donated to New Zealand charities across New Zealand each year. It’s an excellent way of ensuring business outcomes have a positive social impact in the community. They just donated $280,000 across their charity partners, a step up from $100,000 in 2021.
When doing business, Pathfinder aspires to contribute to UN Sustainable Development Goals (SDGs). They also apply an exclusion and ESG criteria to businesses they seek to invest in and ‘actively look for companies doing the right thing.’
With Alvarium Investment NZ as their parent company, Pathfinder is fortunate to be part of a dynamic investment ecosystem. The word Alvarium in Latin means ‘beehive’. Alvarium tells the story behind their name by reflecting that: “Honey bees have developed a highly effective approach to cooperation and a complex consultation process, allowing them to make better decisions”. With over 220 employees and 28 Partners working across North America, Europe and Asia Pacific – the Pathfinder funds are fortunate to be an intrinsic part of the Alvarium hive of investment opportunities.
As a business, Pathfinder believes that investment decisions and consumer decisions can have real-world impact. Pathfinder CEO, John Berry comments:
"We believe our individual decisions as an investor are as important as our individual decisions as a consumer. Both have real-world outcomes that can benefit or harm our planet and communities. We also believe investing ethically can generate good financial returns."
So, if ethical investing is important to you, head on over to the Flint app to check out the Pathfinder funds we have available.
IMPORTANT NOTICE AND DISCLAIMER:
All content shared is of a general nature, current to the time it was penned, and is not financial advice. Before making any investment decisions, please be sure you have completed full due diligence. This should include reading the product disclosure statement (PDS), considering fees and taxation, identifying your time horizons, and understanding the performance history and reputation of the investments you are considering.
Please note: When investing you are not guaranteed to make money (and on occasion you may lose some or all of the money you began with). Seek independent advice to establish if an investment is suitable for your financial situation and long-term wealth generation goals.
Pathfinder, Pathfinder Ethical Investing, Mindful Money Awards 2021, Good Returns, Pathfinder Product Disclosure Statement, Pathfinder Blog, MoneyHub, Mindful Money on Global Water Fund, Mindful Money on Animal Cruelty, Mindful Money on Fossil Fuel Free.