AMWatch

Pension funds hold on to tobacco shares

Although the tobacco industry on this month was excluded from participating in the UN’s corporate sustainability initiative, several pension funds are maintaining their investments in the sector.

Pension funds not ready to ditch tobacco investments. | Photo: Colourbox

Returns on equities from the tobacco industry contribute a considerable amount to Danish pension saving. And they are likely to continue to do so, although the tobacco industry was earlier in October excluded from participating in the UN Global Compact (UNGC) initiative, according to Danish news daily politiken. The ethical corporate network Global Compact now places the tobacco industry side by side with “nuclear weapons and chemical or biological weapons” – thus classifying profit from the sector as unethical – but many Danish pension funds do not hold the tobacco industry in the same level of contempt. Among them is Pensiondanmark, which even joined Global Compact of its own accord. In the first half of 2017, the company owned tobacco equities worth a total of almost DKK 1 billion (EUR 134 million).

“Global Compact’s exclusions will not fundamentally change our view on tobacco companies, as they operate completely within the scope of the law in each country,” CEO Jens-Christian Skougaard tells Politiken. He emphasizes that tobacco equities only constitute 1.1 percent of Pensiondanmark’s equity investments.

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