ZURICH Jan 17 The Swiss National Bank
will sell securities in companies that do not meet its ethical
standards, including those of firms that commit serious human
rights abuses, the central bank said on Friday.
"Recently the board has decided in principle to refrain from
shares of companies that produce weapons condemned by the
international community, seriously abuse fundamental human
rights or systematically cause grave damage to the environment,"
the SNB said in a statement, distributed on the sidelines of an
event on Thursday evening.
On Friday, the SNB, whose portfolio includes weapons
producers and mining firms whose environmental record has been
criticised, declined to specify which investments it would drop.
A spokeswoman said the central bank was offloading shares it
owns that it deems questionable and would avoid future
investments in such stocks.
The SNB holds just over 430 billion Swiss francs ($474.40
billion) in foreign currency investments, accrued while
defending the 1.20 per euro lid on the franc it introduced in
September 2011 to keep the strong franc in check.
Most of this is held in government bonds and deposits with
other central banks, but the SNB has increased the proportion of
equity in its portfolio since the end of the end of 2012 as it
seeks to put its euros and dollars to work.
Stock holdings made up 16 percent of its portfolio at the
end of the third quarter compared to 12 percent at the end of
Two weeks ago the central bank flagged a 9 billion franc
loss for 2013 because of a dramatic drop in the value of its
The SNB uses the weightings of companies within broader
indices to guide its investment in shares, meaning it does not
actively make decisions about which shares to buy.
The SNB already refrains from investment in mid- and large
cap banks to avoid a conflict of interests, the SNB said. It
also does not invest in Swiss equities, save for a small-cap
company that prints Swiss bank notes, Orell Fuessli.
($1 = 0.9064 Swiss francs)
(Reporting by Alice Baghdjian, editing by Alister Doyle)