Impact Investing Network
Indigenous Ethical Investing in New Zealand
"Hāhāea nga ripa o te pō, kia whiti ake ko te māramatanga" (Shred away the darkness, let there be light).
TAHITO is ‘Indigenous Ethical investing’. We have developed a unique way of measuring companies using Māori ancestral knowledge. The name Tahito represents the period in Māori history (prior to the arrival to Aotearoa) from when this knowledge evolved.
TAHITO provides wealth management services operating within an Indigenous ethical investment framework. The first product offering by TAHITO is an ethical Trans-Tasman equities fund. TAHITO is a competitive investment solution for discerning investors who care about the future of people and the environment. We look for companies that have strong imbedded social and environmental values and display long term financial viability. These companies are adaptive, embracing sustainability measures and new technologies to achieve greater outcomes for their communities, people, environment and investors.
The Tahito process is based upon Indigenous collective principles or what we call collective intelligence. We measure companies using Māori ancestral knowledge. At a high level we apply our Indigenous value set to measure relational behaviours (Whanaungatanga) and connectivity (Aroha). By building ‘Aroha’ connection a business improves its ‘Mauri’ or wellbeing.
When measuring Aroha connectivity, we are effectively measuring the transition of companies from the ‘substantive’, internally focused, self-absorbed behaviours, to the Indigenous ideal of ‘relational’, externally connected, collective behaviours. External and collective behaviours incorporate the wider community and the environment.
Purpose of the Idealogy
Ultimately we are applying our best Māori ancestral knowledge for the betterment of future generations. The Māori Indigenous world view is relational and interconnected and it is this world view that forms the basis of the Tahito process.
The Indigenous Māori knowledge was key to living, thriving and traversing across the vast pacific region. This knowledge is still intact today in its traditional form called Whakapapa. While whakapapa is mostly recognised as a genealogy map of your human descent with connections to your extended family, at the higher-level Whakapapa maps our origins and connects us to the world we live in physical and emotional. It is the creation narrative left by our ancestors, our Indigenous blueprint. We call this higher level of Whakapapa ‘Collective Intelligence’.
Collective Intelligence is the intrinsic understanding of connection, everything is interrelated, nothing exists of itself. When you define yourself this way, you understand the Māori world view.
Arguably it is the loss of connection that underpins the major issues we face across the world, from climate change to loneliness. We believe that by re-connecting you can drive positive change in economics, finance and all societal behaviours.
Tahito is about reconnecting people to people and reconnecting people to the environment.
Framework in Action
Māori ethics put people and the environment first because both are fundamental to living and thriving. This thinking falls out of the ancestral Māori worldview which centres on connection and the interdependence of all things.
Its ethics strive for balance and consensuality
Its behaviour is complementary and co-operational
Its target is reciprocity and harmony
We have derived over 50 qualitative and quantitative measures from our Indigenous value set. For the development of the Trans-Tasman equities portfolio, the Tahito process uses these measures to assess each company. The qualitative measures are obtained through direct research and the quantitative measures are integrated with ESG on a values basis. (we select ESG measures that are best aligned to our cultural values). We have some up-front negative screens, but we apply most of our measures through a positive screening process we call this the ‘T score’. High level examples:
Te utu a Tāwhirimatea - Climate change, (e.g. Scope 1, 2 and 3 carbon emissions)
Te Taiao - Environment (e.g. Water stress, Toxic waste, industries that impact on papatuanuku, companies with strong environmental measures, policies and practices)
Te Ngatāhi – Equity (e.g. Capital structure, ownership and control, wealth distribution)
Te Pūtakitini – Diversity (e.g. Female board and exec members, gender and ethnic mix)
Ngā Matataki- Ethics (e.g. controversies, legal issues, ethic scores, code of conduct/ethics)
Following our Indigenous ethical screening process, we apply a robust valuation methodology called the ‘V Score’ The V score involves applying a series of valuation measures and financial analysis tools. Each company is then given a V score based upon the strength of their current and forecast financials. The companies with the best combined T and V scores form the portfolio and are then subject to investment committee scrutiny.
In summary we look for companies that:
Value relationships and are serious about their ethics
Place a high priority on people and the environment
Care for and give back to the community
Have long term sustainable growth potential
The TAHITO portfolio is actively managed to ensure the Indigenous ethics are monitored and maintained and that the investment proposition for each company continues to be justified on a both an ethical and valuation basis.
Why New Zealand needs TAHITO
TAHITO is an indigenous contribution towards a new global story of Diversity Equity and Sustainability. At a local level TAHITO is a Māori contribution toward addressing NZ’s social, cultural and environmental challenges.
By encouraging investment capital toward good sustainable companies, we are helping to ensure a quality of life for future generations.
While there has been some acceptance and inclusion of SRI (Socially Responsible Investing) and/or ESG (Environment, Social Governance measures) by listed companies, fund managers and investment advisors, there is a gap in identifying successful businesses and investments that have a healthy conviction toward environmental and social wellbeing.
A significant change in human behaviours and legislative policy is required to achieve our climate change goals, and address the issues of sustainability, waste, nutrition, health and cultural vitality while sustaining a growing and diverse global population.
Written By Temuera Hall