Cunliffe David: Ethical Investment (Crown Financial Institutions) Bill — First Reading 
Cunliffe David: Ethical Investment (Crown Financial Institutions) Bill — First Reading 
[Volume:665;Page:13013] 
Hon DAVID CUNLIFFE (Labour—New Lynn) 
: 
 I rise to take a call in support of the Ethical Investment (Crown Financial Institutions) Bill. In so doing I commend its proponent Grant Robertson for this excellent initiative. Billions of dollars are invested in the Crown’s financial institutions. They are an important part of the Government’s asset book and they are determinants of corporate behaviour in many sectors of our financial markets. It is absolutely appropriate and indeed necessary from a fiduciary duty point of view that the boards of those Crown financial institutions such as Guardians of New Zealand Superannuation have clarity and legislative protection of their mandate. 
Let us put the counterfactual if one did not do that. I ask members to take National’s argument at face value—if they can bear it—which is that the market will provide. That argument is straight out of 1950s ideology. It is actually asking people who have fiduciary responsibilities to shareholders to break their duties in order to suboptimise their return on investment to informally satisfy potentially some ethical or sustainability criteria. I will say that again. National argues that if one invests in a green share and it is earning less than an oil company or an armaments manufacturer then that is OK because the market will provide. 
Mr Deputy Speaker you know I know they know and the public knows that that is arrant rubbish—arrant rubbish. Directors have a legal responsibility to their shareholders. The guardians of the Superannuation Fund have a legal responsibility to the Crown. We owe it to those directors and to taxpayers to make those obligations crystal clear in law. That is what this bill does. 
This bill goes only a small step beyond the existing requirement on the guardians of the Superannuation Fund which is that they exercise good corporate citizenship and do not to bring the Government of New Zealand into disrepute. But that requirement gives the guardians a hard job because it does not define what that means in practice. This bill assists them by bringing more clarity to the question. 
In advancing that argument I will briefly note the important and ongoing role of the Council for Socially Responsible Investment which has been a continuous and sensible proponent of progress in this area. I also acknowledge Sustainable Aotearoa New Zealand the Sustainable Business Network the Business Council for Sustainable Development and a whole range of other entities. There is also the 100 percent plan which the Government has turned a blind eye to. I acknowledge all of those groups that have been pushing in this direction. 
I particularly single out one individual Dr Robert Howell who has been a longstanding advocate on these matters. When I was a brand-new backbencher on the Government side he helped me with a member’s bill on triple bottom line reporting for Crown entities. My bill did not get as far as this bill has so I am really proud of the work that Grant Robertson is doing here. 
This bill is a sensible and legally necessary step forward—a legally necessary step forward—if we are to uphold New Zealand’s international brand image as an environmentally sustainable peaceful and just beacon of hope in a world that is getting worse and worse to live in with every passing year. But the point is that we cannot informally put an expectation on directors bound by fiduciary responsibilities; we need to give them clarity. We need to protect them from second-guessing and the Crown owes it to boards to pass this bill.