Norway Turns Its Back on Tobacco Companies

(January 22, 2010) – In an effort to remain a role model for socially responsible investment, Norway has blocked 17 tobacco companies from its sovereign wealth fund, Europe’s biggest equity investor.

Since introducing ethical guidelines in 2003, Norway has aimed to make its sovereign wealth fund an archetype for socially responsible investing. “It is important that the ethical guidelines reflect at all times what can be considered to be commonly held values of the owners of the fund,” said Sigbjorn Johnsen, the Financial Times reported.

The $456 billion fund blacklisted Philip Morris, British American Tobacco, Imperial Tobacco, Altria, Reynolds American and Japan Tobacco, among other tobacco companies, after the Norwegian finance ministry ruled that the firms violated the fund’s ethical guidelines.

Additional companies on the fund’s blacklist, which now total about 67 stocks, include Honeywell and Northrop Grumman for their involvement with making nuclear weapons, as well as Lockheed Martin and Raytheon for production of cluster munitions, according to the FT.

Norway’s Government Pension Fund, which holds 1% of the world’s equities, is the world’s second-largest sovereign wealth fund following that of the United Arab Emirates. The fund is currently in the midst of debates and evaluation on its approach to active management.