ACC is facing mounting calls to sell its investment in fossil fuel companies, following the release of a Parliamentary select committee report into its ethical investment policy.

Green MP Chloe Swarbrick is calling on the fund to sell its fossil fuel investments, and if it refuses for the Government to use the law to force its hand.

The Government-owned fund controls roughly $40 billion worth of investment, with nearly $1b of that currently invested in fossil fuels.

It has $778 million invested in renewable energy.

READ MORE:

* How KiwiSaver is changing to match Kiwis' moral values

* ACC questions ignore reality of tricky energy transition

* ACC questioned over billion-dollar fossil fuel investments

* ACC has no plans to divest $1 billion investment in fossil fuels

ACC is already required by law to invest ethically. The ACC Act requires it to invest in a way that avoids "prejudice to New Zealand's reputation as a responsible member of the world community".

The fund has so far held onto its fossil fuel investments, and the Government has refused to step in and force it to sell, opening it to the charge that it is financially vested in, and benefiting from a fossil fuel future at the same time it is trying to reduce the country's emissions.

It can be difficult to work out what is "ethical" in the view of most New Zealanders, so ACC has developed several methods of gauging the sort of investments it believes most New Zealanders would be comfortable with.

ACC believes the country's laws are the best gauge for its ethics. It doesn't invest in areas that touch on things like anti-personnel mines, nuclear explosives, and North Korean weapons.

Following the Christchurch terror attack and subsequent military-style semiautomatic gun ban, ACC prohibited investment in this class of weapons too.

But ACC believes laws aren't the only gauge on what a country thinks is ethical. In 2006, ACC ended its investment in tobacco companies.

It explained this to the committee by saying that Government policy restricting the sale of tobacco made it clear that "most New Zealanders do not consider smoking an acceptable activity," despite it remaining legal.

It also used public opinion polling to work out what kiwis deemed to be ethical.

123rf Investment in fossil fuels continues to grow, despite the climate crisis.

Swarbrick has called on ACC to use this as precedent for selling its fossil fuel investments.

"It's entirely within the ACC Board's mandate to decide to end such investment on ethical grounds as they did with tobacco in 2006," she said.

Swarbrick said the fact the Zero Carbon Act passed unanimously was evidence of public opinion moving against continued investment in fossil fuels.

ACC would only say that it "regularly reviews our ethical investment policy".

In Question Time, Swarbrick pressed Finance Minister Grant Robertson on why he would not use his powers under the Crown Entities Act to force ACC to cease investing in fossil fuel companies.

Robertson said the law created an "arms length relationship between ministers and crown entities," and said he had written to all Government investment funds to outline his expectations around investment practices.

He said this involved "regular reviews, reflecting best practice, and ensuring we meet the highest ethical standards as all New Zealanders would want us to do.

TOM PULLAR-STRECKER/STUFF ACC has $1 billion worth of fossil fuel investments.

Robertson is willing to use these letters of expectations to signal a direction of travel, he's not willing to use the Crown Entities Act to force ACC's hand.

ACC is currently pressed. Low interest rates have made it more difficult to generate the returns it needs to cover its outstanding claims liability.

There has been increased international pressure from climate change activists on international funds to divest from fossil fuel investments.

The Bill and Melinda Gates Foundation faced concerted attempts to force it into selling its fossil fuel-related investments. Even the Rockerfeller family, which made its fortune through oil, has divested a vehicle for their wealth from fossil fuels.

The Fund reduced its investment in fossil fuels in 2016 but did not divest entirely, and in September Gates said such campaigns have "zero" impact on reducing emissions.

Despite growing political pressure around climate change, international capital markets are still betting on a fossil fuel future.

Green MP Chloe Swarbrick is pushing the Government to move away from fossil fuel investment.

A report from the International Energy Agency earlier this year showed that renewable energy investment fell by 1 percent last year to US$304 billion (NZ$471 billion).

New investment in renewable energy is now at its lowest level since 2014, the year before the Paris Climate Accords were signed.

At the same time investment in oil and gas extraction rose 3.7 per cent to US$477 billion (NZ$739 billion) and investment coal mining rose 2.6 per cent to US$80 billion ($124 billion).

The Government's other large investment fund, the New Zealand Super Fund divested $950 million from fossil fuels in 2017.