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Shell pension fund adopts ethical stance

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Shell pension fund adopts ethical stance

Mark Cobley

30 Jun 2008 

The Dutch pension fund for oil group Shell, Stichting Shell Pensioenfonds, one of the largest corporate schemes in the Netherlands, is overhauling its ethical policies and has sold out of one company that makes landmines.

It is reviewing other munitions companies, particularly those involved in making cluster bombs. 

The Shell fund joins a growing movement among big European institutional investors against “unethical” defence companies. 

The €9.6bn ($15.1bn) Swedish state fund AP7 this month said it will sell all its holdings in cluster bomb manufacturers, including defence companies EADS, Lockheed Martin and General Dynamics. 

Dutch public pension schemes ABP and PGGM also sold out of landmine and cluster bomb manufacturers last year, as has the €246bn Norwegian Government Pension Fund, a pool of sovereign wealth capital derived from the country’s oil revenues.

To help enforce its stance, the €19bn Shell scheme has hired Hermes Pensions Management to police its shareholdings, talk to company management and vote at annual meetings on its behalf through the London fund manager’s Eos service. 

The Shell fund said in documents posted on its website that it had “broadened its existing corporate governance policy to include social and environmental aspects of business management”.

The fund is the 11th client of Eos, which advises on combined assets of £70bn (€88.3bn), more than is managed conventionally by Hermes. 

Eos has added several other clients to its roster this year, including VicSuper, an Australian pension fund, and Dutch media-sector plan PNO Media. Its engagement staff has expanded by about a quarter to 25 since January, according to Eos chief executive Colin Melvin. 

The Eos service turned a profit for the first time in 2006, according to Hermes’ most recent accounts. Melvin said the subsidiary company is looking for a chairman, following the retirement of David Pitt-Watson. 

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