Sweden’s SEK670bn (€63.4bn) state pension fund AP7 has announced it is blacklisting three companies, because of violations by the businesses of international norms and conventions.

The fund, which operates the default option in the Swedish first-pillar premium pension system, said it was excluding cannabis research and development firm Cronos Group, due to its involvement in the sale and production of cannabis, which it said defied international conventions.

AP7 also said it was blacklisting Egyptian electrical and engineering company Elswedy Electric, due to violations of environmental norms at the World Heritage site of the Selous Game Reserve in Tanzania.

The Stockholm-based fund also said it was excluding South Korean conglomerate SK Holdings, because of involvement in the violation of human rights in a gas extraction project in Peru.

The pension fund – which now has 74 companies on its blacklist – said in a statement: “AP7 invests in companies that in an acceptable way adhere to the international norms and conventions signed by Sweden.”

The conventions to which it adhered were set out in the UN Global Compact’s 10 principles on human rights, labour, the environment and anti-corruption.

AP7 added that it did not invest in companies involved in the development or production of nuclear weapons and, since 2016, failure to meet the goals of the Paris Agreement would also place a company on its blacklist.

At the beginning of last year, Sweden’s four main national pension buffer funds – AP1, AP2, AP3 and AP4 — announced they would all be adding firms involved in the production or sale of cannabis to their lists of exclusions.

The AP Funds Council on Ethics made this recommendation after the companies — Aurora Cannabis, Canopy Growth and Aphria — were all found to sell cannabis for private use, which it considered to be in violation of the UN convention on narcotic drugs.

Looking for IPE’s latest magazine? Read the digital edition here.