Norway’s Largest Pension Fund Divests From Alcohol, Gambling Investments

Action latest in KLP’s quest to eliminate ‘sin stocks’ from its $80 billion portfolio.


Norway’s biggest pension fund is dumping alcohol and gambling companies from its $80 billion portfolio, continuing its push to divest from unethical equities otherwise known as “sin stocks” to invest responsibly on behalf of its 1 million-plus plan members.

Oslo’s Kommunal Landspensjonskasse, or KLP, will boot 90 companies in the two sectors, including brewers Anheuser Busch and Heineken, and the Malta-based online betting service Gaming Innovation Group. The two sin stock sectors  comprise 1.6% of KLP’s equities portfolio, or $320 million.

Sverre Thornes, the fund’s chief executive officer, said the fund “regularly” questions the ethics of its investment decisions to stick to its responsibility-driven guidelines. “This is not just about what gives the highest return, but also about our investments contributing to positive and sustainable social development,” said Thornes.

Approximately 5% of the world’s deaths per year are alcohol-related, according to the World Health Organization. In Norway, alcohol is linked to more than half of its violence reports.

Thornes admitted that gambling and drinking can be fine in moderation. Addiction to these things, however, “have major negative consequences” for individuals and their loved ones, he said, as well as “great costs” for society.

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Alcohol absorbs more than $2 billion per year in costs from Norway alone.

“With these changes we want to invest the pension funds we manage in other businesses, which to a greater extent contribute to a safe and better world for everyone,” said Thornes.  

The decision, which the plan said it consulted with members and shareowners before making, is similar to what other large pension plans, such as the New York Common Retirement Fund and the California State Teachers Retirement System, are doing by divesting stocks in oil, prisons, and gun companies.

Earlier in the month, the Norwegian fund removed $3.7 billion worth of companies involved in coal-based activities, an extension of its auctions in 2014, when it ditched firms that earn more than 50% of revenue from coal. Like its fellow environmental, social, and governance-oriented institutions, it prefers renewable energy, such as wind power.

KLP recently invested $100 million into a Copenhagen Infrastructure Partners-run renewable energy fund, joining fellow Nordic pension plans PensionDanmark, ATP, and Laegernes.

Thornes also said the pension plan does not and will not invest in pornography.

KLP returned 3.1% in the first quarter of 2019. It allocated to stocks (23.6%), bonds (46.7%), lending (12.1%), property (12.1%), and other financial assets (5.6%) as of March 31.

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CalSTRS Investment Committee Was Split on Private Prison Divestment

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