NZ Super Fund facing questions over stake in tobacco-linked Chinese conglomerate

Holding revealed by Finance Minister contravenes tobacco investment policy

The NZ$19.2bn (€11.2bn) New Zealand Superannuation Fund has faced questions in Parliament over its stake in tobacco producer Shanghai International Holdings Ltd. (SIHL), the Hong Kong-listed conglomerate.

Finance Minister Bill English, in a written answer to a question from the Green Party, disclosed that the fund holds 80,000 shares worth some NZ$333,000 in SIHL, whose subsidiary Nanyang Brothers Tobacco Co. Ltd. is the largest tobacco manufacturer in Hong Kong.

In a statement cited by local media, the fund – which has had a tobacco exclusion policy since 2007 – explained said it had categorised SIHL as an industrial conglomerate and thus it was not captured in its exclusion screening process.

Norway’s Government Pension Fund excluded SIHL in March this year over its tobacco operations.

NZ Super, a founding signatory to the UN Principles for Responsible Investment, said it recently broadened its screening methodology to resolve the problem, whichhas resulted in more companies joining its tobacco exclusions list.

“Pending circulation to our external investment managers, the expanded list will be available on the Fund’s website – as the current list has been since 2007 – by 30 August. The list will include Shanghai Industrial Holdings Ltd,” it said.

Greens Co-Leader Russel Norman called the management of the fund on ethical investment “complacent and unprofessional”.

He added: “The Fund continues to invest in and profit from firms that produce nuclear weapons, sell weapons to Burma, violate human rights, and cause severe environmental damage.”

Norman said it still invests in a range of companies that are excluded by its Norwegian peer, including the likes of BAE Systems, Norilsk Nickel, Barrack Gold, Vedanta Resources, Freeport McMoRan Copper & Gold and Elbit Systems.