Super Fund sells nuclear investments

Last updated 13:10 10/06/2013

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The New Zealand Superannuation Fund has excluded a group of companies from its $22 billion investment portfolio because of their work with nuclear weapons.

Publicly listed companies Babcock & Wilcox, Fluor Corporation, Huntington Ingalls Industries, Jacobs Engineering Group, Serco Group and URS Corporation, have been excluded under the fund's Responsible Investment Policy.

Private company Bechtel Group, which the fund does not have holdings in, will also be excluded.

Lockheed Martin, the publicly-listed weapons maker, was previously excluded on the same grounds.

Nuclear warhead modification, retrofit and maintenance activities at nuclear bases had increased as part of recent programmes to extend the life of nuclear stockpiles in the United States and Britain, the fund said.

The fund's responsible investment manager Anne-Maree O'Connor said the nuclear base operators were now involved in the modification and upgrade of nuclear explosive devices, which warranted exclusion.

The fund's holdings in the excluded companies totalled $2.2 million at the end of March and have since been sold.

On another front, four companies previously excluded by the fund have been cleared to re-enter its portfolio following independent confirmation they were no longer involved in the manufacture of cluster munitions.

The companies are General Dynamics, L-3 Communications, Raytheon, and Goodrich Corp.

There will be no material financial impact on the fund from the exclusions.

The fund first shunned companies involved in the manufacture of cluster munitions and simulated testing of nuclear explosive devices in 2008.

The move followed the Government joining 93 other countries signing a treaty banning cluster munitions and a review of the nuclear issue.

The fund has already excluded investments in nine other companies in the past year including gold mining company Barrick Gold last month.

Barrick Gold's Porgera goldmine in Papua New Guinea was dumping about 14,500 tonnes of waste daily into the local river. The fund said Barrick, the 95 per cent owner of the Porgera goldmine, was excluded as there was "no practical remedy for the environmental impact of riverine tailings", and Barrick's progress on resolving security concerns had been slow.

The fund said its investment portfolio was continually reviewed, based on information from specialist screening agency MSCI, and other sources, to ensure its list of excluded companies remained up to date.

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