Sustainable investment delivers strong returns: NZ Super

The Guardians of NZ Super has published its annual report for the financial year ending 30 June 2026, indicating the strong performance stems from its sustainable investment approach.

The fund size has grown to $77 billion (NZ$94.35bn), excluding tax, and achieved a 14.17% return after costs and before tax, in FY26.

NZ Super chief executive Jo Townsend said it is now in its second year reporting under its strengthened GHG emissions assessment methodology, and climate change remains a key focus area for sustainable investment moving forward.

"Climate change remains a key focus as we seek to further enhance our sustainable investment approach," he said.

"Sustainability-related reporting continues to be a dynamic area. Our approach is to maintain proportionality, integrity and transparency in our disclosures, while allowing time for the quality and reliability of data, tools and practices to mature."

She said sustainable investment continues to deliver strong returns to its members, and in the current financial year the super fund will continue to strengthen portfolio construction and enhance investment outcomes through various accounts, including stepping up its commitment to sustainable investment.

During the financial year, NZ Super also achieved strong ratings since the 2025 PRI Assessment report, recognised by RIAA, and achieved a 100% score in Global SWF's annual Governance, Sustainability and Resilience Scoreboard.

"These results provide useful benchmarking. However, we recognise that sustainable investment is a fast-evolving area and we continue to look for ways to strengthen our approach," the report said.

As part of its 2026 Reference Portfolio review, the board endorsed the development of the continued development in sustainable investment, including the Sustainable Investment Roadmap for 2026-2030, as well as welcoming a new director for sustainable investment.

Key recommendations from WTW's five-yearly independent statutory review indicated the fund can aim for improved details in investment goals and targets, better balance of financial risk, and placing greater emphasis on systemic stewardship.

"In addition, we were encouraged to deepen our focus on the fund's real-world impacts through both our investments and stewardship activities," the report noted.

The report also addressed the recent judicial review that found its policies were not formulated in accordance with the relevant statutory requirements.

NZ Super accepted the court's findings and has published an updated set of Sustainable Investment policy documents, which utilises a standalone framework to describe the policies, standards and procedures.

"The changes to the policy documents respond to the court's findings by explaining sustainable investment activities and decision-making processes in detail, including identifying the relevant standards, explaining tests to be applied, and recording who is responsible for key decisions," the report said.

"These changes support consistent decision-making and provide greater transparency about how decisions are made while preserving the flexibility required to apply our statutory mandate in complex and evolving circumstances."