Mercer has announced it will exclude investments in companies that manufacture tobacco products and controversial weapons, with full implementation expected by the end of 2018.
The exclusions were made with the Responsible Investment Team and the Mercer Funds Board, and created on the basis that excluding such companies will not have significant implications.
The Exclusion Framework will see Mercer divest from 17 tobacco companies and nine controversial weapons companies, with an estimated $110 million being divested across all portfolios.
Mercer defines “controversial weapons” as cluster munitions, landmines, biological and chemical weapons, and despite investment exclusions to tobacco manufacturers, Mercer will continue to invest in tobacco retailers.
In their announcement, Mercer said the decision follows a growing trend in Australia and New Zealand to exclude tobacco and controversial weapons from superannuation portfolios.
The decision to turn to sustainable investing, which was made in December 2017, had already been made by 60 per cent of superannuation funds, including AMP Capital.