Danish MP Pension abandons tobacco
Written by Sunniva Kolostyak
Danish pension scheme MP Pension has decided to pull all investments in different tobacco companies after years of debate.
The board of MP Pension has decided to divest from the industry after years of public debate, despite providing the fund with stable, high returns.
The industry has been excluded because of the fund’s commitment to accountability in its investments, and because of tobacco’s proven links to a variety of serious and life-threatening illnesses, the fund said in a statement.
MP Pension chair Egon Kristensen said that the high returns has made it a difficult choice as responsible investors must take returns into consideration.
“As our primary goal is to secure good pensions for our members, it is not simple or straightforward to make a decision to exclude an entire sector. However, we believe that tobacco in the future will be worse than so many other consumer goods, so from an investment perspective a divestment is not bad, and there are some obvious risks in the sector.”
Furthermore, the fund said that in addition to producing and selling a “highly hazardous product”, the tobacco industry is often criticised for harmful working conditions, child labour, lobbying and aggressive actions against the authorities in developing countries seeking to restrict tobacco sales and marketing.
These elements have contributed to the board’s decision to reinvest the DKK 240m (€32.2m) currently invested in tobacco. This accounts for 0.21 per cent of MP Pension's total portfolio.
“We are now drawing a line. The right to health is a fundamental human right, covered by the UN conventions,” Kristensen continued.
“Tobacco stands out from a lot of other consumer goods which you can call unhealthy. According to WHO (World Health Organisation), tobacco kills almost half of its users, equalling seven million people every year. That is why the most responsible choice – both as a pension scheme and consumers – to get rid of smoking.”