24 Jul 2020

James Shaw says Kiwibank, not ministers should decide on investors

1:23 pm on 24 July 2020

Climate Change Minister James Shaw says Kiwibank's decision to stop doing business with companies dealing in fossil fuels is the right one.

Climate Change Minister James Shaw at a press conference announcing the Government's reforms to clean up our  waterways, Beehive Theatrette, Wellington.

Climate Change Minister James Shaw. Photo: Pool / Stuff / Kevin Stent

Yesterday, State-Owned Enterprises Associate Minister Shane Jones said it was not the role of Kiwibank to make moral judgements about who it did business with.

Shaw told Morning Report ministers should not be telling businesses how they should be run.

He said the government wanted to phase-out the use of fossil fuels gradually.

"You're talking 10 years, if not 20."

He said even though Crown-owned, it was up to Kiwibank to choose who it does business with.

"It's a matter for the board and for management to decide."

Shaw said the performance of the oil and gas sector - monitored by the Boston Consulting Group - found it was the worst out of the 33 sectors.

"It's not a great sector in terms of its investment returns."

He wouldn't say if the bank should also pull out working with companies that used fossil fuels to operate, like Fonterra.

Kiwibank's list of businesses that do harm to people or the environment include companies dealing with fossil fuel extraction, tobacco, palm oil, casinos, predatory lending, synthetic drugs and weapons.

"I don't know how many businesses that affects," Shaw said.

Jones yesterday said: "My warning to the chairman of Kiwibank is that the bank that goes woke may end up broke.

"Their role is to moderate the market and to stand as a force for Kiwis, not to make moral judgements ... about what is an appropriate industry that can legally survive in New Zealand."

He said he would be seeking answers from the board chair of NZ Post, which has a controlling stake in the bank.

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