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Tobacco producers excluded from Government Pension Fund Global

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According to the Ministry of Finance – Norway, “The Ministry of Finance has decided to exclude 17 companies that produce tobacco from the Government Pension Fund Global (GPFG), based on a recommendation from the Fund’s Council on Ethics. The divestment of shares in these companies has now been completed.

“When the Graver Committee proposed the current ethical guidelines, there was debate on whether to exclude tobacco producers from the Fund. Under some doubt, it was decided that tobacco should not be excluded. After the Graver Committee submitted its recommendation, there have been international and national developments through the entry into force of the WHO Framework Convention on Tobacco Control and the tightening of the Norwegian Tobacco Act. We have taken these changes on board and believe – amongst others in light of the consultative input in connection with the evaluation of the ethical guidelines – that it is timely to exclude tobacco from the Fund. It is important that the ethical guidelines reflect at all times what can be considered to be commonly held values of the owners of the Fund,” says Minister of Finance Sigbjørn Johnsen.

In Report No. 20 to the Storting on the Management of the GPFG, the Ministry proposed excluding tobacco producers from the Fund. The move was supported by the Storting. The specific delimitation of the tobacco criterion was described in the National Budget for 2010. The recommendation was made in line with this. On the basis of the index providers’ industrial classification of companies in the GPFG’s equity and fixed-income portfolio (FTSE All Cap and Barclays Global Aggregate) and information on the companies’ own websites, the Council on Ethics has identified 17 companies engaged in activities affected by the criterion for exclusion of tobacco producers. Since the companies themselves state that they are primarily engaged in tobacco production, the Council on Ethics has not found it necessary to contact the companies to confirm this.

The excluded companies are: Alliance One International Inc., Altria Group Inc., British American Tobacco BHD, British American Tobacco Plc., Gudang Garam tbk pt., Imperial Tobacco Group Plc., ITC Ltd., Japan Tobacco Inc., KT&G Corp, Lorillard Inc., Philip Morris International Inc., Philip Morris Cr AS., Reynolds American Inc., Souza Cruz SA, Swedish Match AB, Universal Corp VA and Vector Group Ltd.

In drafting a new criterion on screening tobacco producers, the Ministry of Finance placed particular emphasis on finding a delimitation that fits well with the structure of the current ethical guidelines, including existing rules for negative screening of certain weapons manufacturers.

On this basis, a rule has been adopted that in principle will exclude all production of tobacco, regardless of the percentage of business represented by tobacco production. This means that it will be possible to exclude a few more companies than those listed under the industrial classification “tobacco” by the index providers. The new screening criterion for tobacco production is limited to tobacco products and does not include associated products such as filters and flavour additives.

The Council on Ethics has given notice that it may return with further recommendations to exclude companies that produce tobacco.”

read more: Ministry of Finance – Norway

Korea’s NPS Invests In Crypto Exchanges Amid Crackdown

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South Korean news outlets have reported that South Korea’s National Pension Service (NPS) has unwittingly invested roughly US$ 2.4 million in four local cryptocurrency exchanges – Korbit, Upbit, Coinplug, and Bithumb – even as regulatory officials move to subdue the unbridled enthusiasm for crypto trading that has flourished in the tiny country. The US$ 550 billion pension scheme invested in the cryptocurrency exchanges indirectly through two venture capital funds handled by external managers with exclusive rights over asset allocation, according to an NPS officer.

Crypto trading has proved wildly popular in South Korea, drawing an estimated one million citizens to the largely unregulated exchanges that have cropped up over the past few years. South Korea, which is ranked first in the world in terms of internet sped, is the largest market for cryptocurrency transactions behind Japan and United States, and accounts for 29.8% of trade globally, according to a report released by the Korea Insurance Research Institute (KIRI) in December 2017.

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Ripple Attempts to go the Central Bank Route

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San Francisco-based Ripple, a tech company that professes the use of blockchain to reboot the payment systems globally, landed a big deal with the Saudi Arabian Monetary Authority (SAMA). Ripple started a pilot program that will be spearheaded by SAMA and a few Saudi banks to deploy xCurrent for cross-border payments. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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Investment Corporation of Dubai Eyes $1 Billion Loan Deal

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The Investment Corporation of Dubai (ICD) plans to raise US$ 1 billion in a loan to refinance existing debt. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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