RI · ESG · ethical investment · sustainable investment
Responsible investment (RI / ESG / ethical)
A fund that applies environmental, social and governance (ESG) screening criteria — typically excluding sectors such as tobacco, controversial weapons, fossil fuels, or applying positive sustainability tilts.
Responsible investment (RI) is an umbrella term covering funds that apply environmental, social and governance (ESG) considerations to the portfolio. The exact definition varies by fund — common approaches include negative screens (exclude tobacco, controversial weapons, fossil-fuel reserves), positive tilts (overweight low-carbon or high-ESG-rated companies), and engagement (active voting and dialogue with portfolio companies).
In NZ, every fund that calls itself "responsible" or "ethical" must document its specific screening framework in the Statement of Investment Policy and Objectives (SIPO). The SIPO is the binding rule-set; the PDS gives a plain-English summary.
There is no single industry standard for "ethical" — funds differ markedly. Always check the SIPO's specific exclusion list and screening methodology before relying on a fund's RI/ESG label.
Primary sources
Related terms
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SIPO
Statement of Investment Policy and Objectives (SIPO)
The fund-manager document setting out the fund's investment objectives, strategy, asset allocation ranges, and investment-policy constraints (including any responsible-investment screens).
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PDS
Product Disclosure Statement (PDS)
The headline legal document a NZ managed fund or KiwiSaver scheme provides to retail investors, summarising the fund, fees, risks, and how to invest.