The 2.59 trillion Norwegian kroner ($458 billion) Government Pension Fund-Global, Oslo, sold shares in 17 tobacco producers, according to the Norwegian Ministry of Finance.
As of Dec. 31, the total value of those investments was 14.63 billion Norwegian kroner.
The ministry said the tobacco sell-off followed a recommendation from the Government Pension Fund's Council on Ethics to ban all tobacco producers.
The companies are Alliance One International, Altria Group, British American Tobacco BHD, British American Tobacco PLC, Gudang Garam, Imperial Tobacco Group, ITC, Japan Tobacco, KT&G, Lorillard, Philip Morris International, Philip Morris Cr AS, Reynolds American, Souza Cruz, Swedish Match, Universal Corp. and Vector Group.
The ban is based on an ethical decision to remove tobacco manufacturers from the pension fund's investments following an April 2009 report by the Ministry of Finance to the Norwegian Parliament.
The exclusion is based on the production of tobacco, not on the sale of tobacco products or the production of additives or ingredients used for tobacco products. Norwegian Minister of Finance Sigbjorn Johnsen said in a news release that it was important that the ethical guidelines of the fund reflect at all times “what can be considered to be commonly held values of the owners of the fund.”
He cited international and national developments such as the World Health Organization Framework Convention on Tobacco Control and the tightening of the Norwegian Tobacco Act, as examples of policies aimed at stopping smoking. “We have taken these changes on board and believe — amongst others in light of the consultative input in connection with the evaluation of the ethical guidelines — that it is timely to exclude tobacco from the fund,” he said.
Hugh Wheelan is the editor of Responsible Investor.