Financial regulator’s ‘frightening’ failure to define ethical investments

Breach of the State Services Commissioner’s Code for Standards of Integrity and Conduct

Wise Response made two formal complaints about the breach of the State Services Commissioner’s code for Standards of Integrity and Conduct. The first deals with the Financial Markets Authority (FMA) unwillingness to amend their Disclosure framework for Integrated Financial Products. (In that Disclosure it states that values are subjective and constantly changing and hence it cannot define what an ethical investment is.) They are therefore ignoring misleading or deceptive conduct by Kiwisaver funds.

The second concerns the unwillingness of the New Zealand Superannuation Fund (NZSF) to take the Wise Response complaint about them seriously, even though a number of irresponsible and unethical investments in their portfolio were identified.

In both instances the SSC Code was breached in regard to the principles of integrity (the quality of being honest and having strong moral principles), trustworthiness  (avoiding any activities, work or non-work, which may harm the reputation of your organisation or of the State Services), and responsible (act lawfully and objectively).

The letter of complaint is available here as a PDF.

Dr Robert Howell

An article from Dr Robert Howell on Newsroom outlines the The Financial Markets Authority’s claimed lack of ability.

Wise Response has written to Members of Parliament to highlight this failure.

Dear Member of Parliament – This letter is to bring to your notice an article written by one of our members, Dr Robert Howell, after our Society had meet with representatives from the Financial Markets Authority.  We were disturbed by what we discovered and feel it is very important that you are aware of the situation.   It appeared on Newsroom 20 July 2022. 


The Financial Markets Authority Act states that financial products and services require ‘fair trading’ and include prohibiting misleading or deceptive conduct. But when it comes to ethical investing, the authority claims that values are subjective and constantly changing and hence it cannot define what an ethical investment is.

Yet New Zealanders are currently appalled by the atrocities in Ukraine where murder, rape, torture and other war crimes are being committed. The authority is unable to state that these are wrong, or whether human rights abuses, bribery and corruption are unethical or not.

It is unable to condemn slavery or animal abuse, the poisoning of rivers, waterways and seas, pollution of the air, and degradation of the environment generally. 

Yet in an unpublished survey we conducted last year, 20 of the funds had invested in at least one of the 60 banks (directly or indirectly) that invested a total of $3.8 trillion into fossil fuels from 2016–2020.t.

We respectfully ask that you do what you can to rectify this outlandish state of affairs which impedes all New Zealanders’ ability to make NZ a better place.