Iceland’s second-biggest pension fund, the Pension Fund of Commerce (Lífeyrissjóður verzlunarmanna, LV), announced it is blacklisting 138 firms as the result of its new responsible investment policy, revealing it has already sold ISK3bn (€20m) of investments, with more to follow.

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The ISK1trn pension provider said most of the exclusions were firms producing coal and oil sands, while 22 made “controversial weapons”, 15 were considered to be in breach of the UN Global Compact and 13 were tobacco producers.

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The long list of exclusions published on LV’s website includes well-known companies such as the UK’s BAE Systems and Rolls-Royce, Lockheed Martin and Boeing of the US and Hong Kong-listed Jardine Matheson.

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LV said in a statement: “The reason is that the companies’ operations do not meet the criteria for sustainability and responsible investment according to the new overall policy of the LV board on responsible investment.”

The Reykjavik-based pension fund said it was implementing a new responsible investment policy that supported responsible long-term return on assets, sustainability and climate action, adding that any firms that manufactured certain products or were considered to be in breach of certain international standards on human rights and business ethics would be excluded from its investments.

LV said the exclusions applied to all of its portfolios, adding that its asset-exclusion policy was based on its own methodology, but also followed models from leading pension funds in the Nordic countries, among other things.

The fund said the implementation of the policy took time, so some companies on the exclusion list would have to remain in LV’s portfolios for the time being.

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