ZURICH, Jan 17 (Reuters) - 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 2012.
Two weeks ago the central bank flagged a 9 billion franc loss for 2013 because of a dramatic drop in the value of its gold holdings.
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)