New Zealand's largest Crown entity investor, ACC, is defending an investment of nearly $1 billion in fossil fuels.

ACC is responsible for New Zealand's injury prevention and compensation scheme and paid out $1.9 million for new claims last year.

It holds more than $40b in investments – of which $920m, or about 2.3 per cent, is in oil and gas production.

Greenpeace executive director Dr Russel Norman says the investments were "grossly irresponsible".

"Essentially ACC are betting on climate destruction being successful – that the oil industry will prosper and therefore the climate will be destroyed."

As an agency responsible for injury prevention, ACC was maximising harm through its investment in fossil fuels, Norman said.

The information was provided in response to an official information request by advocacy group ACC Futures on May 22.

In a letter to ACC Minister Iain Lees-Galloway, ACC Futures says it appeared "ACC had not considered whether financing the greatest threat to human wellbeing is ethical".

The minister had no involvement in decision making for ACC investments under the Crown entities model and responsibility lay with the ACC board, a spokeswoman for Lees-Galloway said.

The letter was forwarded to the office of Finance Minister Grant Robertson, as he had a role of overseeing ACC's investment function.

Stuff has approached Robertson for comment.

An ACC spokesman says the commission's ethical investment policy aligned with other Crown entities and relevant legislation, and did not exclude investment in carbon-intensive businesses.

A blanket exclusion on carbon-emitting activities was unlikely "unless Parliament banned those specific activities", he says.

"Our ethical investment policy is kept under active consideration ... but at this point we have no plans to change our approach to fossil fuel investments."

The ACC Act required a statement in the corporation's service agreement "relating to ethical investment for avoiding prejudice to New Zealand's reputation as a responsible member of the world community".

ACC's ethical investments policy took account of law, but also "considers its role in New Zealand society, the health sector and the investment community".

ACC had excluded investments in tobacco companies since 2006, and its policy said it did not invest in activities associated with anti-personnel mines, nuclear explosive devices, cluster munitions, whale meat processing, cannabis, North Korean munitions, mercenary activities, and automatic or semi-automatic firearms.

Green Party co-leader James Shaw says ACC had set a "low bar" for ethical investing and its position was not "very prudent given the stranded asset risk that fossil fuel industries represent".

"At the very least, ACC should match the New Zealand Super Fund's climate change strategy of reducing their exposure to fossil fuel reserves and carbon emissions."

The party supported a direction under the Crown Entities Act for divestment from fossil fuels for all Crown entities.

"Fossil fuels are a sunset industry. Continuing to invest in fossil fuels makes no sense for our environment or for the balance sheets of these Crown entities."

Norman said a law change would probably be needed to make ACC "behave responsibly" and stop investing in fossil fuels.

The bulk of ACC's investment in non-renewable fuel sources, $858.4m, is in energy sector companies with more than half of their total revenue in fossil fuels.

A further $61m is in companies with less than half of total revenue from fossil fuels.

The remaining $21.5m is held indirectly through independently managed investment funds, corporate bonds of $119.6m and $23.9m in government bonds.

-Stuff.co.nz/Cate Broughton