Simplicity is a nonprofit fund manager offering KiwiSaver schemes. They currently manage funds for over 150,000 people at a value of $6.5 billion¹⁾. They advertise their funds as “ethical investments” that follow a responsible investment policy²⁾ which rules out investments in military weapons, civilian firearms, fossil fuels, and companies deemed to be non-compliant with UN Global Compact principles like human rights abuses³⁾.

Despite this policy, Simplicity invests into Israeli companies that support or profit from the genocide of Palestinians. An analysis of their KiwiSaver portfolio by Mindful Money⁴⁾ revealed investments in Bank Hapoalim BM, Bank Leumi Le Israel BM, and Mizrahi Tefahot Bank, three Israeli banks included on a February 2020 list of companies conducting business in illegal Israeli settlements in the Occupied Palestinian Territory from the Office of the UN Human Rights Commissioner⁵⁾. Simplicity removed funding from those banks as of 13 November 2023 following pressure from its members⁶⁾. Simplicity chief operating officer Andrew Lance was eager to state that the company was not taking a political stance on the Palestinian genocide:

We very explicitly do not want to be taking a political stance. It's not part of our policy at all. But in this particular instance, given the research that we've now been given access to, we feel that it's correct under our responsible investment policy, these companies would've breached that.“

The research that Simplicity had “now been given access to” was publicly posted by the NZ Super Fund on 2 March 2021⁷⁾, 2.5 years before Simplicity removed those investments.

Simplicity's most significant ongoing Israeli investments are in Israel Government bonds⁸⁾⁹⁾. These bonds have been made available to international investors to help fund Israel's war efforts. They promise a higher yield versus US Treasury yields to make them more attractive to investors. A Financial Times analysis¹⁰⁾ included the following:

Investors and analysts noted that the bumper issuance was done through private placements rather than via open syndications and roadshows, which are usually carried out when new bonds are launched. The reason for this, they said, could be to raise funds for the war effort quickly or without attracting unwanted attention, and could be a sign of how nervous some investors had grown about buying Israel’s debt.

A February 2024 Bloomberg article¹¹⁾ highlights Israel's deteriorating economic position due to the war and the use of bonds to attempt to recover:

Israel will have to sell a near-record amount of bonds this year to fund its war against Hamas, according to several finance ministry officials with knowledge of the matter. The task got more complicated on Friday, when Israel’s credit rating was downgraded for the first time ever.

Analysis of the change in holdings between 30/09/23 and 31/03/24¹²⁾ show one of the bonds Simplicity invested in was released 07/01/24¹³⁾ as part of these recent fundraising efforts. By investing the money of Simplicity's members in these bonds, it is directly supporting Israel's attempts to continue funding the government's genocidal war.

On top of this, further analysis of Simplicity funds¹⁴⁾ show investments in:

• NICE Ltd, a global software and artificial intelligence company. It was formed by members of Unit 8200¹⁵⁾, Israel’s cyber spy unit, tasked with spying on Palestinians living under Israeli apartheid¹⁶⁾¹⁷⁾. NICE Ltd made hundreds of millions of dollars with their technology before selling the surveillance and intelligence divisions in 2015 (including a $158 million sale to Elbit Systems, Israel's largest weapons company¹⁸⁾) to pivot to their current CRM software operations¹⁹⁾.
• Israel Chemicals Ltd, a chemical manufacturer who provides white phosphorous to the US military for use in projectiles²⁰⁾. These weapons are then provided to the Israeli army²¹⁾ who used it on civilians in Lebanon in October 2023²²⁾²³⁾. Update July 2024: Simplicity have clarified that as of May 2024 they no longer invest in ICL Group and these changes will be reflected in their September 2024 public filings. They did not address their other Israeli investments.
• Azrieli Group, Israel's largest real estate group with holdings in the aforementioned Bank Leumi Le Israel BM²⁴⁾.

In response to members' complaints following Stop Arming Israel's campaign, Simplicity issued the following statement the week of 8th July 2024:

Firstly, we would like to clarify that ICL (Israel Chemicals Limited) is no longer held by any of our portfolios. This has been updated on the original post and website that included the inaccuracy.

We remain a predominantly passive investor, which means we follow broad market indexes for the majority of our investments, including all international shares and bonds. We have a Responsible Investment Policy which guides our approach to ethical investment. In order to adhere to our policy, we use an external index provider Bloomberg, which applies a rules-based negative screening methodology. This excludes companies from an index that are involved in certain activities or behaviours, based on ESG data gathered by Sustainalytics for shares and MSCI for bonds. The screening also ensures all companies that we invest in comply with the UN Global Compact's human rights principles.

The indexes are updated quarterly to add or remove investments based on these rules. As new data comes in from MSCI and Sustainalytics this is used to assess the screening rules.

For example, in November last year a review was undertaken via Bloomberg, using additional research published by the NZ Super Fund, and three holdings were found to no longer meet the requirements of our Responsible Investment Policy with regard to adherence to UN Global Compact Guidelines. These were three Israeli Banks: Hapoalim BM, Bank Leumi Le Israel BM, and Mizrahi Tefahot Bank Ltd. As a result of the review, we sold all our fund holdings in those companies.

We will continue to monitor the NZ government’s position on this conflict, with any local legislation applied to our Responsible Investment Policy where possible.

As a nonprofit KiwiSaver and investment fund manager, we are here to try and make a difference and we take member concerns very seriously. So we really appreciate you getting in touch, we are better for the fact that our members care so much.

Sustainalytics made significant changes to their policies relating to Israel in 2022 following lobbying by pro-Israel groups like the ADL²⁵⁾.