Sweden's second buffer fund AP2 has divested from about 60 tobacco companies and companies involved in maintenance and modernization of nuclear weapons systems, the fund announced on Tuesday.

The decision is based on the new investment regulation on sustainable asset management for the AP Funds, with effect from the beginning of January this year. According to the Act, the AP Funds must manage their assets and lead by example through responsible investments and responsible ownership.

"The divestment from tobacco companies is in line with the intention of the convention on tobacco control: a sharp reduction in tobacco consumption and tobacco smoke’s harmful effects," AP2 writes in a press release.

Divestments from companies involved in maintenance and modernization of nuclear weapons systems are in line with the intention of long-term disarmament of nuclear weapons in all countries, as expressed in the Non-Proliferation Treaty (NPT), the fund adds.

"AP2 has previously excluded nuclear weapons companies operating in countries that according to NPT are not allowed to have them," the fund with AUM totaling about SEK 334.8bn continues.

KLP: Society pays a high price for addictions

Increased consideration of sustainability and ethics has been a headline in Norway, too, as the country's largest pension fund, KLP, has announced to no longer invest in gambling companies and alcohol manufacturers.

"We manage more than NOK 600bn in pension funds for around one million Norwegians. It is a great responsibility, which is why we continuously assess our own effort," KLP CEO Sverre Thornes states on the fund's website. "Following a close dialogue with our customers and owners, we have decided to withdraw from investing in alcohol and gambling companies," he added.

KLP, and funds under KLP's management, divest from companies deriving more than five percent of their revenues from gambling and alcohol manufacture. The decision includes a total of 90 companies, such as online gambling firm Betsson, Gaming Innovation Group, spirits and beer maker Diageo, brewers including Carlsberg and Heineken as well as alcoholic beverages company Arcus. KLP's total investments in these companies amount to nearly NOK 3bn.

Alcohol and gambling addictions have major negative consequences for the individual and their loved ones, and society pays a high price as well, Thornes notes. KLP adds that more than 50 percent of violent incidents in Norway involve alcohol. "We make these changes with an intention to invest pension money in other businesses, contributing to a safe world for all," Thornes says.

Danish pension fund MP Pension’s decision to quit the cigarettes in March lead to divestment of securities worth DKK 240m.

Pension funds hold on to tobacco shares 

Swedish insurer Länsförsäkringar: No more tobacco holdings

Tobacco-Free Finance Pledge gets the first two Finnish signatories