Norwegian pension giant excludes two firms over reconstituted tobacco leaf

Divestment of US-based Schweitzer-Mauduit and China’s Huabao

The NOK4.3trn (€569bn) Norwegian Government Pension Fund has excluded two tobacco companies – US-based Schweitzer-Mauduit and China’s Huabao International – following a recommendation from its ethics body.

The exclusion is due to the firms’ involvement in producing reconstituted tobacco leaf (RTL).
New York Stock Exchange-listed Schweitzer-Mauduit is also the world’s largest supplier of papers to the tobacco industry. Hong Kong-listed Huabao produces and sells tobacco flavours.
The decision to exclude the companies is based on a recommendation from fund’s Council on Ethics, the Ministry of Finance said.

At the end of 2012, the fund had a stake of around NOK165m in Huabao and NOK50m in Schweitzer-Mauduit.
Meanwhile, the top-level panel that was established earlier this year by the government to review the fund’s responsible investment practices is to hold a seminar on June 20.The five-strong Strategy Council is led by finance academic Elroy Dimson of the London Business School.
At the event, Dimson will provide a status report on the Council’s work so far and State Secretary Hilde Singsaas will also give a presentation about the giant fund’s responsible investment practices.
The seminar will include debate on environmental and social issues and corporate governance, the Finance Ministry added.
The other members of the panel are Idar Kreutzer, the former CEO at Norwegian finance institution Storebrand who now heads trade association Finance Norway, Rob Lake, the former Director of Responsible Investment at the Principles for Responsible Investment, Hege Sjo, senior advisor at Hermes Fund Managers, and Laura Starks, professor at the University of Texas who is a also a trustee at TIAACREF.
The Ministry of Finance has asked the council to report by the end of October.