Auckland (23 October 2007) - The Guardians of New Zealand Superannuation today announced their intention to divest tobacco stocks from the New Zealand Superannuation Fund. As at 30 June 2007, the Fund held $37.6 million invested in tobacco stocks on its segregated portfolio, equivalent to 0.29% of total assets.

The divestment decision was made following an assessment of the tobacco sector against the Guardians' responsible investment framework.  The Guardians apply a set of guidelines that enable the assessment of the Fund's investments for environmental, social, and governance issues against relevant international conventions, New Zealand law, and Crown actions. 

If an issue is identified as breaching the Guardians' responsible investment standards, the Guardians then assess the most appropriate response for the Fund.  The Guardians' preference is to engage with a company or industry sector as a responsible shareholder, and in concert with other likeminded investors.  If engagement is assessed to be ineffective, then exclusion or divestment will be considered.

The Guardians' Chief Executive Officer, Mr Adrian Orr said "In assessing the issue of tobacco manufacture, the Board concluded that the Fund's investment in this sector was inconsistent with our responsible investment standards. This decision was based on product safety issues and New Zealand's commitment to specific international conventions. 

While our preferred approach to responsible investment issues is to engage with the company or sector, in the case of tobacco manufacture we determined that this would be in conflict to the long-term goals of a shareholder, and inconsistent with New Zealand commitments to international conventions, in particular the objectives of the World Health Organisation Framework Convention on Tobacco Control.  As a result, the Board resolved to divest from the sector. 

The decision to divest from tobacco stocks should not be seen as a precedent for future decisions or actions.  The Guardians have a transparent framework for responsible investment assessment. Recent international experience in this area highlights that engagement with companies, in concert with other investors, is often the most effective means by which to improve company policies, products and practices, within the sphere of shareholder influence. 

The Guardians continue to assess other industry issues," concluded Mr Orr.

The Guardians' responsible investment framework can be found here as well as background information for this Tobacco Stocks Divestment.

-Ends-  

Contact details regarding this release: Karine Fox, Head of Communications, New Zealand Superannuation Fund, +64 9 373 8963, kfox@nzsuperfund.co.nz.