The market share for ethical investments is unlikely to increase unless consumers start voting with their feet, according to an ethical investment group.
A report by Mindful Money showed KiwiSaver investments in what it called harmful companies have hit a record $8.6 billion.
Funds invested in oil, gas and coal increased to $3.2 billion, with a doubling in exploration and new field development.
Mindful Money founder Barry Coates said almost 9 percent of total KiwiSaver funding is aligned with companies invested in fossil fuels, gambling, alcohol, animal cruelty and areas of digital harm.
"The level of KiwiSaver investment in harmful companies has never been higher.
"While most KiwiSaver providers say they are investing responsibly or using an ESG (Environmental, Social and Governance) framework, only a few funds are comprehensively avoiding investments in harmful companies.
"Most are continuing to invest a significant proportion of the public's funds in issues that Kiwis want to avoid."
Coates said KiwiSaver investors should ask their providers for an explanation or consider switching to a fund that invests ethically, such as in renewable energy and other climate solutions.
"Our concern with the vast majority of the KiwiSaver funds is that they are not, from our perspective, doing a particularly good job of listening to their clients.
"I think it's going to need a strong voice of consumers. People don't tend to pay attention to their KiwiSaver once they get it."
He encouraged people to look closely at the details of their fund to see if it reflected their values, as well as checking it was earning good returns.
"People can have their cake and eat it too by making good decisions around their KiwiSaver."