Norway's Oil Fund Excludes Further Companies on Ethical Grounds
July 10 2018 - 5:53AM
Dow Jones News
By Dominic Chopping
Norges Bank Investment Management, the arm of Norway's central
bank that manages the country's trillion dollar oil fund, said
Tuesday that it has excluded a further four companies from the fund
on ethical grounds.
Among those excluded is U.S. electricity producers PacifiCorp
and Tri-State Generation and Transmission Association Inc., based
on the fund's ethical criterion on the use of thermal coal.
Brazilian meat producer JBS S/A (JBSS3.BR) has been excluded due
to an unacceptable risk that the company is responsible for gross
corruption, and Chinese fabric producer Luthai Textile Co Ltd due
to an unacceptable risk of serious or systematic human rights
violations, according to a statement from NBIM.
Data from the end of 2017, the latest available, shows that the
oil fund held $129 million in PacifiCorp corporate bonds and $42.8
million in Tri-State Generation and Transmission Association
corporate bonds.
It had a $143.4 million investment in JBS, equal to a 1.78%
stake, and $5.7 million in Luthai Textile, equal to a 0.57% stake
in the company.
Further, the oil fund has placed Berkshire Hathaway Energy Co.
and its subsidiary MidAmerican Energy Co. under observation based
on its coal criterion. PacifiCorp is also a unit of Berkshire
Hathaway Energy.
Taiwan's Nien Hsing Textile Co Ltd has, in accordance with the
recommendation from the oil fund's Council on Ethics, been placed
under observation due to an unacceptable risk of serious systematic
human rights violations, it said.
In a final move, the executive board of NBIM has decided to
follow work undertaken by India's UPL Ltd to counteract child labor
as part of the fund's active ownership efforts over a period of
five years.
The Norwegian Ministry of Finance has issued specific guidelines
for the oil fund with criteria for observation and exclusion
endorsed by Norway's parliament.
Among these criteria, the fund must not invest in mining
companies and power producers that derive 30% or more of their
revenue from thermal coal. Companies may also be excluded if there
is an unacceptable risk of conduct that is considered grossly
unethical.
Norges Bank decides on the exclusion of companies from the
fund's investments, or to place them on an observation list.
There are currently 145 companies excluded from the fund and 23
under observation.
Write to Dominic Chopping at dominic.chopping@wsj.com; Twitter:
@domchopping @WSJNordics
(END) Dow Jones Newswires
July 10, 2018 05:38 ET (09:38 GMT)
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