Pension fund to drop sin stocks

Norway | Pursuing more ethical investments, the country’s largest pension fund, KLP will divest from companies that generate revenues from alcohol and gambling, a further push by KLP to drop so-called “sin stocks” from its portfolio. This was reported by The Financial Times on 28 May 2019.

The fund, which has around USD 80 billion in assets under management, will drop companies which derive more than 5 percent of their revenue from alcohol or gambling. This adds up to a total divestment of USD 320 million.

Among the 90 firms now ostracised are brewers AB-InBev, Heineken and Greene King, as well as champagne group LVMH and drinks company Diageo.

“This is not just about what gives the highest return, but also about our investments contributing to positive and sustainable social development,” the fund’s Chief Executive Sverre Thornes was quoted as saying.

The fund pointed to a statistic by the World Health Organisation that in Norway, more than 50 percent of violent incidents involve alcohol. Alcohol related costs to the nation are estimated at USD 2 billion per year.

The pension fund manages the retirement assets of over one million Norwegian public sector workers. Already in 2014, KLP dropped companies that derive more than 50 percent of their revenue from coal. Now it plans to drop companies that obtain more than 5 percent of their revenue from coal.

Is it farsighted or just ironic that in a country, whose government receives about one fifth of its revenues from the petroleum industries (2019), a pension fund considers fossil fuels an unsustainable investment?