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PGB to ditch tobacco from its investment universe

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The €25bn Dutch industry-wide pension fund PGB has announced that it will no longer invest in tobacco.

In a statement, it added that it had also extended the list of non-investable companies involved in the production of controversial weapons to almost 100.

The decision was triggered by a survey of its participants and pensioners, in which an overwhelming majority rejected investments in both industries.

PGB said that its decision applied to companies for which turnover from tobacco or controversial weapons was at least 25%. The scheme said it would divest its existing stakes of stock and bonds.

The divestment would also apply to firms involved in the production of weapons containing white phosphorus or depleted uranium, as well as companies playing a part in the production of nuclear weapons in or for countries that haven’t signed the Nuclear Non-Proliferation Treaty.

PGB has already excluded investments in companies using child labour and producing cluster ammunitions, anti-personnel mines and chemical and biological weapons.

Together with the €45bn metal scheme PME, PGB is the second large Dutch pension fund outside the medical sector that has black-listed tobacco investments.

The €189bn healthcare scheme PFZW and the occupational pension funds for general practitioners (SPH) and medical consultants (SPMS) – both with assets of €10bn – have already banned tobacco from their investment universes.

The €396bn civil service scheme ABP has not taken such a decision, despite staff of academic hospitals urging it to do so earlier this year.

PGB said it had hired BMO Global Asset Management to vote at company annual general meetings and also carry out engagement practices as part of its environmental, social and governance strategy,.

It said that its participants also wanted the pension fund to speak out against corruption and high bonuses at companies in which it is invested.

Earlier this month the influential pensions consultant Keith Ambachtsheer urged schemes to divest from tobacco-related assets to avoid breahces of fiduciary obligations.

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