Rotorua Trust investment portfolio prospers despite COVID-19 environment


Rotorua Trust’s diverse socially and environmentally responsible investment portfolio has enabled it to continue to support the community and preserve long-term investment capital, despite a turbulent first quarter of 2020.

Established in 1994 to serve the community of Rotorua, the Trust was formed out of the sale of Rotorua Electricity Limited, with initial capital of $32 million. The Trust partnered with wealth and investment company Mercer in 2015 who operate a Responsible Investment approach for the funds.

Through careful management, this capital has grown to over $160 million, with more than $125 million invested back into the Rotorua community since the Trust’s inception.

Mercer’s Responsible Investment approach bases investment decisions across four main pillars: integration of Environmental, Social, and Governance (ESG) factors into decision making; stewardship, which promotes voting and engaging with companies; themed and impact investing; and exclusions, which stops the portfolio investing in certain sectors.

Rotorua Trust Chairman, Stewart Edward, says ethical investing through Mercer ensures the Trust’s portfolio excludes investments such as tobacco and controversial weapons.

“This exclusion means hundreds of companies (and the many securities issued by these companies) are excluded from our investments; we’re clear they are untenable due to their expected negative social impacts.

“Our funds are currently allocated across a range of ethical investments across many asset classes including Trans-Tasman and global shares, property, infrastructure, natural resources, cash and bonds.

“Having such a diversified range of investments and associated stability of returns through our partnership with Mercer is key to being able to deliver a consistent level of grants to our community to create a better Rotorua for all – today and tomorrow.”

Rotorua Trust Trustee and head of the Trust’s Investment Committee, Gregg Brown, says it’s important for the Trust to partner with an investment company that is a signatory to the United Nations Principles for Responsible Investing.

“Not only are we assured our investments mitigate harm through Mercer’s approach, it means the Trust’s portfolio has a much lower average carbon intensity than the market average. It has also allowed our Portfolio to engage with companies on topics ranging from waste management to improving labour practices and increasing board diversity and voting in company meetings to reflect these engagements.”

Leah Keys, a Responsible Investment Analyst at Mercer says “beyond one-on-one engagements with companies, Mercer has used its size and scale to join global investment collaborations aiming to create ethical change for New Zealand investors.

“For example, following the 2019 Christchurch mosques massacre, Mercer signed on to a global investment collaboration to encourage Facebook, Alphabet and Twitter to strengthen controls to prevent the livestreaming and dissemination of objectionable content.”

The Trust is committed to ensuring their investments create benefits for the people of Rotorua, while protecting the health and wellbeing of our global communities.

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