Pensioensfonds Zorg en Welzijn (PFZW) has excluded tobacco products from its investments, the Dutch fund announced.

PFZW, which has around €135bn of assets at the end of May 2013, said that its discussions with the producers about the problems within the sector "failed to bring about the improvements desired".

The fund, which has around 2.5m employees and ex-employees in the care and welfare sector, said that it had concerns with the way tobacco is produced, for example the employment conditions and the use of child labour, and the way the product is aimed at young people.

The problems are "typical" of the sector, PFZW said, and since there is a "difficult relationship" between tobacco products and the healthcare sector, it decided to exclude all tobacco producers.

"Although smoking is a personal choice," said PFZW director Peter Borgdorff, "we have always recognised and highlighted the associated problems. We could not come to any other conclusion other than that these investments are unsuitable for us.

"Excluding tobacco producers was, therefore, the only correct option in respect of both our policy and the care and welfare sector in which our participants are active."

First published 02.07.2013

monique_simpson@wilmington.co.uk