KiwiSaver has been criticised for continuing to invest in companies linked to Israeli settlements in the occupied West Bank. Photo: IRD/screenshot
An ethical investment group is raising fresh concerns about KiwiSaver funds invested in companies involved in constructing and financing Israeli settlements in the occupied West Bank.
Research from Mindful Money showed investment in such companies increased by 20 percent in the six months to March to $85 million.
Last month, the United Nations' highest court said Israeli settlements in the occupied Palestinian territories were illegal, though it was disputed by Israel.
Mindful Money chief executive Barry Coates said the charity identified a number of companies involved in settlements, covering a broad range of categories, including demolition, financing and surveillance.
He said index funds - where KiwiSaver investments followed an index - were part of the reason for investments in such companies.
"A lot of the funding is because these companies are held within index funds, so they're included in a broad range of funds," Coates said.
"But also, in there is a number of active investment funds where they are not indexed but there has been a decision to actively invest in these companies."
A United Nations report has previously stated Israeli settlements violated Palestinians' human rights.
Coates criticised KiwiSaver funds for continuing to invest in companies linked to the settlements, after Mindful Money wrote to fund managers to divest from such companies in November 2023.
"Palestinian people have been forcibly displaced from their land and homes, supported by the Israeli military and global companies," he said.
"Investing in those companies may be legal for KiwiSaver and other investment funds, but it is certainly not an acceptable moral position."
Coates said Mindful Money's research found over the longer-term, returns from investments in ethical firms were "at least as high, if not, higher" when compared to investment that ignored ethical investment.
Last year, non-profit fund manager Simplicity divested shares in three Israeli banks related to the financing of the settlements.
KiwiSaver investors wanting to check their funds' investments can visit the Mindful Money website.