ABP exits tobacco and nuclear weapons after ‘changes in society at an international level’

Dutch pension fund ABP will exit €3.3bn of tobacco and nuclear weapons stocks by next year, it has announced.
The move comes after years of pressure from public groups about the €405bn fund’s holdings in the two controversial sectors. “Investments in tobacco and nuclear weapons have been a dilemma for us for quite some time,” said Erik van Houwelingen, Chairman of ABP’s Executive Committee for investment policy. “Changes in society, also at an international level, were a reason for ABP to put the topic on the agenda. We felt a need for a broader discussion.”
On this basis, ABP, which represents employers and employees of government and educational institutions in the Netherlands, has created a new assessment framework for exclusions. The framework allows the board of trustees to exclude a product that “is by definition harmful to people” – and “if our influence as a shareholder cannot change anything about that fact”. If the product “has no harmful effect if [it] would no longer be there” or if a worldwide treaty exists for the purpose of eliminating the product, it may also be excluded.
“This resulted in ABP’s decision that, in addition to the existing exclusions, tobacco andnuclear weapons no longer fit in with our sustainable and responsible investment policy,” van Houwelingen continued.
The exclusions relate to manufacturing companies, associates and producers “elsewhere in the same chain”.
ABP is the latest in a string of investors to pull out of the two industries in recent months. In November, BT Financial Group – the wealth management arm of Westpac in Australia – revealed it would exclude tobacco and controversial weapons from its flagship funds. The same month, Canada’s OPTrust announced it would divest from tobacco on the basis that it is not possible to consume the product in a non-harmful way; and TelstraSuper – Australia’s telecoms pension provider – also exited the industry.
In a statement, the ABP said that in the past, the stocks provided “healthy returns”, but that it “believes that the outlook has changed”. It added that good returns were available on other investments so “missed profits, if any, due to this decision will be very limited”.
The new framework will be additional to its existing sustainability policy.