Barry Coates,  former Green Party MP and creator of Mindful Money, a tool which reviews the ESG credentials of KiwiSaver funds, says New Zealand should follow other jurisdictions in making ESG a default part of advisers' discussions with clients.

ESG is not covered by the new code, which takes a high-level approach to guidance on how advice is provided.

"A simple thing would be to make it an obligation," Coates said. "Advisers should ask their clients about their ethical preferences and that should be part of the process of providing advice."

The comments come as jurisdictions around the world push policy measures on ethical investing.

The European Commission's action plan on financing sustainable growth recommends financial advisers including ESG as part of any investment advice.

"That would be important for New Zealand," Coates added.

"It would help to provide more information to the public and issues the public are concerned about. The number of advisers who are RIAA members is relatively small. It would be great to see more advisers who understand responsible investing and provide that information to clients."

Coates expects the formation of the Sustainable Finance Forum to lead to more policy changes in New Zealand over the coming years. 

"It is one area where this subject can be taken forward. It's important to look at how finance can support a move towards societal goals of sustainability and greater equality," Coates added.

Adviser Jordi Garcia, of New Zealand Financial Planning, said it was already something he raised with clients as part of the options open to them. "As it happens, our own investment approach with our clients incorporates an ESG framework. However, I would hesitate to make it a compulsory requirement, certainly at this stage given wide definitions around what constitutes ESG."

Angus Dale-Jones, chairman of the Code Working Group, said it was not the code's role to say what should or should not be in advice scope.

"That said, the suitability and client understanding standards in the code are very broadly written to ensure that the client gets proper explanations, so the advice giver must nonetheless keep in mind the client's circumstances. And for some clients, ESG will be an important need."

Mindful Money, which launched last month, compares different KiwiSaver funds on ESG. Coates wants to broaden this to investment funds offered by fund managers in New Zealand, and information on impact investing in the next year.