NZ Super Fund doubles down on sustainability

The New Zealand Super Fund (NZ Super Fund) has reaffirmed its commitment to sustainable investing, arguing climate changes, resource constraints and broader sustainability risks reman central to delivering resilient long-term returns despite shifting market sentiment around environmental, social and governance (ESG) investing.

In a statement, the sovereign wealth fund said recent market volatility, geopolitical tensions and changing investor attitudes had prompted some to question the relevance of sustainable investment principles. However, it maintained sustainability remains fundamental to long term portfolio construction.

The Guardians of New Zealand Superannuation co-chief investment officer Will Goodwin noted "sustainability is not a 'nice to have', nor is it a cyclical overlay."

"It is fundamental to risk, return, and resilience over decades, making it a core component of any long-term investment strategy," Goodwin said.

The comments come as global investors increasingly move beyond traditional ESG compliance measures and adopt a broader, systems-based approach to managing long-term risks and opportunities.

Research commissioned by NZ Super Fund and investment consultant Willis Towers Watson (WTW) in 2025 found major asset owners, including sovereign wealth funds and public pension funds, were increasingly incorporating climate and sustainability scenarios into portfolio decisions making.

The fund said climate change remains the most financially material sustainability challenge facing investors and continues to shape its investment strategy.

"We explicitly recognise climate change as a major source of future uncertainty, requiring an adaptive approach to managing systemic risks and capitalising on new opportunities," Goodwin said.

"The NZ Super Fund's investment strategy is designed to navigate and to benefit from what will be a multi-decade transition to a lower-carbon global economy," he said.

The fund highlighted growing global investment in renewable energy, electrification and decarbonisation-linked opportunities, pointing to its own involvement in exploring a proposed 1GW offshore wind farm off the coast of Taranaki alongside Copenhagen Infrastructure Partners.

At full scale, the project could generate almost 10% of New Zealand's current installed electricity capacity.

This follows a recent governance setback for the NZ Super Fund, after the Guardians confirmed they would not appeal a High Court judicial review that found aspects of their sustainable investment policies were unlawful due to a lack of clarity and specificity around how human rights considerations are applied.

The ruling has prompted the fund to revise its policy framework, reinforcing the need to better articulate how ethical and sustainability standards are implemented in practice, even as it continues to argue that these considerations remain central to long-term investment strategy and portfolio resilience.

The fund said successfully long-term investing requires remaining focused on structural trends rather than short-term market narratives.

"It is about managing risk across decades, not reporting cycles," Goodwin said.

"And for the NZ Super Fund, it is about delivering resilient, long-term returns for all New Zealanders, both the present generation and those to come," he said.