The New Zealand Superannuation Fund has sold shares in some of the world's biggest companies to reduce exposure to firms emitting greenhouse gases.

The fund is quitting or reducing holdings in 300 firms as part of its "carbon transition". They include Exxon Mobil, Shell, BP and Statoil and local firms New Zealand Oil & Gas and Genesis Energy.

The firms are part of the Super Fund's huge passive investment portfolio - making up two thirds of the fund's total investments - and similar principles will be applied now to active investments.

The oil and gas business has a strong future despite substantial divestment by the New Zealand Super Fund, the lead industry body says.

The $35 billion fund has substantially or completely withdrawn from 300 companies, including some of the world's biggest oil companies such as Exxon Mobil, Shell, BP and Statoil, calling them risky investments.

The move, affecting the fund's $14bn passive equity portfolio, involved about $950 million in shares.

It said it feared its value might be at risk if too much money was tied up in oil and gas.

The fund's chief investment officer, Matt Whineray, said there was a significant risk, which had not been factored into the market. The worry was that climate change jitters would dry up economic returns from oil and gas companies and cause their share prices to shrink over time.

The Petroleum Production and Exploration Association said that was just one opinion, however, and other investors thought oil and gas still had bright prospects.

It can take relatively little effort for investment managers to give the appearance of being concerned about responsible investment issues. But it takes more than glossy marketing material, membership of an industry group or simple rhetoric to be a truly responsible investment manager.

Record growth sees NZ-based responsible global bond fund at nearly $500 million in half-year

In a burst of extraordinary growth, the NZ-domiciled Hunter Global Fixed Interest Fund has almost half a billion dollars under management less than six months after launching.

In the first class of semester when I have a new bunch of university students studying business ethics, we always start with a quick task. I ask them which companies they think are “bad”. I then pick one, what we might call the worst of the worst. It’s usually Big Tobacco. Then we see what it would take to work for them.

As I raise the stakes, usually by offering a bigger and bigger salary, hands begin to rise indicating willingness. By $500,000 I can have a third of the class, with others seriously considering bending their own principles. But there are some who just won’t do it, ever. Not even if the salary is in the millions with a car thrown in.

‘ESG integration’ is only one of many factors that characterise responsible investment, according to investment manager Australian Ethical.

Aside from environmental, social and governance (ESG) integration, a number of other factors must be considered for responsible investment to truly live up to its name, according to Australian Ethical head of ethics Stuart Palmer.

Mr Palmer outlined a number of other "dimensions" to responsible investment, including negative screening, positive screening, the influence investors had on companies and governments, and the impact of the UN's 17 sustainable development goals.

Sugar may become a negative value screen for the responsible investment portfolios of the future, according to Martin Currie Australia.

Speaking in Sydney yesterday, Martin Currie Australia portfolio manager Will Baylis said while sugar was not being negatively screened in their income strategies at present, it could escalate as an issue in years to come.

“I would suspect, down the track, that sugar may well become quite topical,” Mr Baylis said.

In March 2017 AMP Capital released a report that found sugar was emerging as an investment risk for the global food and beverage industry.

The alleged return gap is demonstrably not true and now with a proliferation of data, easily proven to be untrue. When you next hear someone claim that returns from responsible investing are lower, you are literally hearing a blast from the past. Overseas, in larger markets that have moved more readily into the acceptance of RI as a legitimate investor choice, the conversation has moved on. Five or ten years ago, the question being asked was “Will Responsible Investing cost me return?”. This quickly moved on to an acceptance that RI returns are certainly no worse than traditional investing. Now the questions being asked are “How much additional return can I get from RI investing?” and “Is responsible investing an investible factor?”

Banks are "only ever" going to promote the good that they do, but brokers can "effect change" by educating clients about ethical lenders, a broker has said.

Karen Doust, associate and broker at Jenesis Finance, told The Adviser that brokers can have a role in enacting positive change by placing business with ethical lenders.

Jenesis Finance has a mandate to offer clients a panel of "ethical and sustainable lenders" that are "community minded and/or are operating in an environmentally conscious manner".

Ms Doust said that more often than not, these lenders are smaller banks, credit unions or non-bank lenders.