Barry Coates: Mindful Money founder on the Government scrapping climate-related disclosures for KiwiSaver funds

A fund manager says Kiwis deserve to know the impact of their investments. 

The Government plans to scrap annual climate disclosures for KiwiSaver funds, and raise the reporting threshold for listed companies from $60 million dollars to $1 billion.

Mindful Money founder Barry Coates says these rule changes will reduce transparency. 

"We're stepping backwards on what should be information that should be disclosed by companies. If you're investing in a KiwiSaver fund, do you want to know whether that KiwiSaver fund is bearing a high climate risk? I would want to know." 

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Episode Transcript

Speaker 1 (00:00):
Together due to clans.

Speaker 2 (00:02):
The government is softening rules that force listed companies to
disclose their climate risks. Now, the ardern era law forced
these forced these companies worth more than sixty million dollars
to report climate risks. That's now been changed to only
affect companies worth more than a billion dollars. Barry Coates
is the founder and the CEO of Mindful Money and
is not a fan of these changes. Hi, Barry, Hi, Ever,

(00:22):
what don't you like about this?

Speaker 1 (00:25):
I don't like the way that in a way, we're
stepping backwards on what should be information that should be
disclosed by companies and also by managers of Kiwisaber and
other funds. We should be telling the investors, the public
stakeholders about what their climate impact is and what the

(00:46):
climate risk is of the companies and wide, because this
is valuable information not only about the climate and what
companies are doing, it's vital financial and information that climate
changes is a real cost. It's a real risk to companies,
whether it be physical impacts or transitory impacts, or regulatory

(01:08):
impacts or reputational impacts. It's been widely recognized that these
are these are kind of substantial risks.

Speaker 2 (01:15):
Okay about it. Practically, if you're an investor and you're thinking, well,
I might buy some shares and Turners, what is what
about what they say about climate is going to make
you decide whether you put your money into Turners or not.

Speaker 1 (01:28):
Well, if Turner's made produce lines are kind of at
risk of climate disruption and their supply chains are at
risk of climate disruption from adverse weather or events, which
of course they are, investors may decide that that their
particular kind of supply lines are at a higher risk

(01:50):
if they if they talk about that in their and
their climate reports. So it gives information to investors to say, well, actually,
I'm not sure about the climate risk of Turners. I'm
not sure that I want to invest.

Speaker 2 (02:02):
Do you think people are actually making these It sounds
fair enough what you're saying, but it sounds like what
we're asking these people to do in order for an
investor to make that decision is just extreme, right. I mean,
Turners itself said that that their first report costs them
a million dollars. It feels a little over the top,
doesn't it.

Speaker 1 (02:20):
It does? It does, And you know what we've heard.
I hadn't heard that figure from Turners, it sounds like
a lot most other companies, but even.

Speaker 2 (02:30):
Other companies, even other companies, as reported by r n
Z were spending up to two hundred thousand dollars on it.

Speaker 1 (02:35):
Yeah yeah, but Heather, you know, the thing is you
put the system in place in order to bounder to
report that requires initial investment. Every year thereafter you're updating
the information that goes into those reports, and the first
year you're going to have higher costs. After that you're
going to have a far reduced a burden of reporting.

(02:55):
And that's been shown already from the second year reporting.
So so you know, this is the time rather than
kind of throwing out the regulations, we should be reaping
the benefits from from the investments that already made.

Speaker 2 (03:08):
Rather than say, what's the risk Barryer of us of
us stepping back from this, I think two risks.

Speaker 1 (03:15):
One is that investors and customers and people who who
companies do business with or investors do business with, they
don't have the right information that is relevant to the
decisions they're making. And the second thing is an investment
risk that if you're investing in a company, if you're
investing in a fund, you're going to want to know

(03:36):
about it. If you're investing in the Kivsaver Fund, do
you want to know whether that company is that keV
Saver Fund is bearing a high climate risk from their portfolio?
I would want to know.

Speaker 2 (03:46):
Can't you just turn up with the annual share can't
you turn up to the annual shareholders meeting and ask
the question?

Speaker 1 (03:52):
Unless you've got a regulated system of reporting, what you're
probably going to be told And every time you do
it in an AGM is a different story because it's
not packed up by a properly regulated reporting system. And
that's what this system gives us. It gives us a
level playing field for everyone to report on the same basis,
and that's really important to be able to compare across

(04:13):
these companies.

Speaker 2 (04:14):
All Right, Barry, thank you very much for your time.
Barry Coates, Mindful Money, founder and CEO.

Speaker 1 (04:19):
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