DENMARK - Danske Bank's pensions arm Danica Pension will offload DKK103m (€13.8m) of shares in companies linked to the manufacture of cluster bombs within the next fortnight, in the wake of public criticism of its holdings.

The sum is invested in four companies that make cluster bombs, or components of them - Raytheon, Lockheed Martin, General Dynamics and L-3 Communications - Danske Bank's head of press Jonas Sunn Torp confirmed.

"We are going to terminate those investments very soon…we will do it in the next two weeks," he said, since it was likely an ongoing project to purge the fund's portfolio of ethically undesirable investments would result in that decision anyway.

In August last year, Danske Bank signed up to the UN Global Compact - a set of principles on corporate social responsibility.

But at the end of last week, ethical watchdog DanWatch criticised Danica Pension for holding such investments, along with holdings in several other companies which it says harm the environment. The complaint triggered widespread press coverage and public criticism.

"Since last summer, we've been working on a new line to decide we're going to invest under an ethical framework," said Sunn Torp. "We had planned to end that project around Christmas," but then it was extended to the first quarter of this year, he added.

"Within the first quarter of 2008, we will have a clear policy on what we will invest in," he said, adding it would then take weeks or months to work out how to implement that policy.

That said, the pension fund does not intend to rush to divest any more of its controversial holdings, he said.

DanWatch is quoted as saying Danica Pension has DKK285.6m invested in companies linked to the nuclear weapons industry, including BAE Systems, Finmeccaneca, Boeing, EADS and Honeywell.

Sunn Torp said the pension provider had to strike a balance between investing ethically and getting a good return for clients. "We want to make sure we do not harm the return for the customers," he said.

Meanwhile, the Danish Red Cross called for full clarity on how the country's pension savings were invested.

"We are working towards a ban on cluster bombs, and are supported by many Danes," said Anne Sofie Lauritzen, leader of the charity's campaign against the controversial munitions.

"So it seems quite grotesque that through their pension schemes, ordinary employees are unknowingly supporting businesses that make money out of producing these terrible weapons," she added.

Cluster bombs are canisters which contain a number of smaller "bomblets", which can wander off course and, like landmines, remain unexploded, endangering civilians for years after a conflict.

At the end of 2007, Danica Pension had DKK246bn in assets under management.

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