Swedish fund AP2 ditches tobacco and nuclear weapons investments

[June 04, 2019]  STOCKHOLM (Reuters) - Sweden's AP2, one of the country's five main national pension funds, will no longer invest in tobacco and nuclear weapons-linked stocks, in a move it said on Tuesday deepened its commitment to sustainability.

As global demand for sustainable investing increases, a growing list of large investors, including Dutch fund ABP, have ditched tobacco and weapons stocks due to the adverse health, social and environmental impact of these industries.

AP2 said it had sold its holdings in around 60 companies either involved in tobacco or in the maintenance and modernization of nuclear weapons systems.

"The divestment from tobacco companies is in line with the intention of the convention on tobacco control: a sharp reduction in tobacco consumption and the harmful effects of tobacco smoke," it said in a statement.

Additionally, the departure from companies related to nuclear weapons systems was in line with the aim for all countries to disarm nuclear weapons, it added.

The holding was worth 2 billion Swedish crowns ($212 million), or roughly 0.6 percent of AP2's 334 billion Swedish crowns under management, according to a spokeswoman, who declined to name the 60 stocks.

The move comes after sister funds AP1 and AP4 took similar action and follows the introduction earlier this year of Swedish rules that demanded these funds manage assets "in an exemplary way through responsible investments and... ownership."

In 2014 the AP2 fund ditched its investments in 83 coal, oil and gas and utility companies due to financial climate risks.

(Reporting by Esha Vaish in Stockholm, editing by Johannes Hellstrom and Louise Heavens)

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