The Norwegian oil fund’s decision to dump tobacco companies has cost the world’s largest sovereign wealth fund $1.9bn in missed profits over the past decade. The losses have prompted hardened campaigners for tobacco divestment to admit the economic arguments for shunning companies like Philip Morris and Imperial Tobacco are flawed, potentially leading other big investors to review their exclusion policies.

According to data on the Norwegian oil fund’s website, its tobacco divestment policy dented returns from 2006 to 2015 by 0.68 per cent, equating to missed profits of $1.94bn. The $860bn fund, which pulled out of the tobacco sector in 2010 on ethical grounds, recorded total accumulated returns of $288bn over that period.

The Norwegian finance ministry, which sets the ethical investment guidelines for the oil fund, said it chooses to blacklist companies irrespective of “the financial consequences”. State secretary Paal Bjørnestad, whose Progress party voted against the oil fund dropping tobacco stocks in 2009, said: “There are no plans to consider directing the fund to reinvest in the tobacco sector.”

But Alan Blum, founder of the University of Alabama Center for the Study of Tobacco, who led an international campaign to persuade institutions to drop tobacco in the 1980s, said other investors were likely to return to the sector, given the clear performance benefits.