Norway’s largest pension fund divests from gambling and alcohol

KLP is latest fund to drop ‘sin stocks’ from portfolio

Norway's largest pension fund will divest from companies that generate revenue from alcohol and gambling, a further push by KLP to drop so-called "sin stocks" from its portfolio.

The fund, with $80 billion (€71.48 billion) in assets under management, will sell out of companies that derive more than 5 per cent of their revenue from alcohol or gambling, a divestment of $320 million. Among the 90 now excluded companies are Budweiser-maker AB InBev, champagne group LVMH, beer brewers Heineken and Greene King and spirits maker Diageo.

"This is not just about what gives the highest return, but also about our investments contributing to positive and sustainable social development," said chief executive Sverre Thornes. The pension scheme manages the retirement assets of Norway's public sector workers.

“We manage around $80 billion for more than 1 million Norwegians. It is a great responsibility, and we therefore regularly consider whether we do this in a good enough way.”

The decision follows similar moves by other large investors to more closely scrutinise environmental, social impact and governance standards in their portfolios.

Incidents of violence

The company pointed to a statistic by the World Health Organisation that in Norway, more than 50 per cent of incidents of violence involve alcohol, and alcohol related costs to the nation are estimated at $2 billion annually.

Mr Thornes added: “Alcohol and gambling addiction have major negative consequences for individuals and their loved ones, as well as great costs for society . . . We want to invest the pension funds we manage in other businesses, which to a greater extent contribute to a safe and better world for everyone.”

In 2014 KLP dropped companies that derive more than 50 per cent of their revenue from coal from its investments. The fund announced earlier this month its plan to divest from companies that obtain more than 5 per cent of their revenue from coal.

Pornography is already excluded from the pension's portfolio.

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