Danish labour-market pension fund PBU has come under fire for indirectly holding equities in US aerospace, defence and commercial products company Alliant Techsystems, even though the company is on its own blacklist due to the production of cluster bombs.

Danish news service Kommunen reported that PBU – Pædagogernes Pensionskasse, the Danish pension fund for education practitioners – had exposure to Alliant Techsystems through an unnamed passive index investment fund.

The stock is listed among “American shares” on the pension fund’s website.

Lasse Bjerg Jørgensen, treasurer at labour organisation BUPL (Danish Union of Early Childhood and Youth Educators) and a member of PBU’s board of trustees, told Kommunen he could not understand why the pension fund should have money in a blacklisted business.

Bjerg Jørgensen said: “In BUPL, we have a clear expectation that the guidelines we have approved on the board are followed by PBU.”

PBU’s management said they would now look more closely at the investment, Kommunen reported.

A spokesman for PBU told IPE the report was correct to his knowledge but declined to give any further comment on the matter.

Cluster bombs eject smaller bombs over a wide area and because of this are said to be dangerous for civilians during attacks and for a long time afterwards.

Their use is prohibited by countries that have ratified the 2008 Convention on Cluster Munitions.

According to the Kommunen report, PBU described the problem of being exposed to blacklisted stocks because they formed part of passive index funds as a fact of life in the investment world.

PensionDanmark, PKA and Danske Bank have also excluded Alliant Techsystems for its production of cluster bombs, Kommunen reported.

Separately, Denmark’s largest commercial pension fund PFA said it had been included in the 37-strong ‘Hall of Fame’ list from Dutch peace campaign group PAX of financial institutions “with a clear and comprehensive policy on cluster munitions”.

In its November 2014 update to its “Worldwide investments in cluster munitions – a shared responsibility” report, PAX included the Norwegian Government Pension Fund Global, Sweden’s AP1-4 pension funds and AP7, Fonds de Compensation in Luxembourg, Denmark’s ATP and the Netherlands ABP in its list of financial institutions that exclude investment in cluster-bomb makers.

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