The companies in question are:
* China State Construction Engineering Corp Ltd. due to the unacceptable risk that the company contributes to or is itself responsible for gross corruption. The Ethics Council’s investigations have shown that CSCEC can be linked to several corruption allegations or suspicions in a number of countries in the period 2004–2021. The oil fund owned NOK 90 million worth of shares in the company.
* The Chinese pharmaceutical company Tianjin Pharmaceuticals Da Re Tang Group due to unacceptable risk of the company contributing to serious environmental damage. The company also produces traditional Chinese medicine. The company’s products include animal parts from globally endangered species such as leopard bones, pangolin shells and musk from musk deer. Production of traditional Chinese medicine that includes endangered species can contribute to the illegal trade of these species and increases the risk of their becoming extinct. The oil fund owned shares worth NOK 22 million in the company.
* The Indian company Larsen & Toubro and the American General Dynamics are excluded because of the companies’ production of key components for nuclear weapons. The background for the Ethics Council’s recommendation regarding Larsen & Toubro. is the company’s role in building India’s strategic submarines. General Dynamics is also excluded due to the company’s role in the construction of the US’s strategic submarines. At the end of 2023, the oil fund owned NOK 4.92 billion worth of shares in Larsen & Toubro and NOK 7.2 billion worth of shares in General Dynamics
* The Spanish security company Prosegur Compania de Seguridad SA is excluded due to the unacceptable risk that the company contributes to serious and systematic human rights violations. Prosegur operates security services in several countries in Latin America and they are accused of violence that can endanger life and health, and violations of the rights of tribal people in Brazil. Oljefondet owned NOK 72 million worth of shares in Prosegur.
* The American company Turning Point Brands is excluded because the company produces tobacco or tobacco products. At the end of last year, the oil fund owned NOK 15 million worth of shares in the company.
The shares have already been sold
– The executive board has not independently assessed all details in the recommendations, but finds it sufficiently proven that the criteria for exclusion have been met, says a statement from Norges Bank.
– Before exclusion, the bank must assess whether other measures, including the exercise of ownership, may be more suitable. The executive board’s assessment is that the exercise of ownership is not an appropriate means of action in these cases, the bank writes further.
The decisions have been taken following advice from the Ethics Council in March and April. The decisions are only made known after the fund has sold out of companies.
Criteria
The oil fund must not be invested in companies that are guilty of gross or systematic violations of human rights, serious environmental damage, serious violations of the rights of individuals in war and conflict.
The fund must also not own shares in companies that contribute to gross corruption and other gross breaches of basic ethical norms and unacceptable greenhouse gas emissions.
Nor can the fund own companies engaged in the production of cluster munitions, nuclear weapons, anti-personnel landmines, tobacco or cannabis.
#Norges #Bank #excludes #companies #oil #fund
2024-09-06 20:48:24
Norges Bank Investment Management
Table of Contents
Ethical Exclusions: Companies Blacklisted by Norges Bank’s Oil Fund
In a recent move, Norges Bank’s oil fund has excluded several companies from its investment portfolio due to ethical concerns. The companies in question are China State Construction Engineering Corp Ltd., Tianjin Pharmaceuticals Da Re Tang Group, Larsen & Toubro, General Dynamics, Prosegur Compania de Seguridad SA, and Turning Point Brands. The decision to exclude these companies was made following recommendations from the Ethics Council in March and April.
Reasons for Exclusion
China State Construction Engineering Corp Ltd. was excluded due to the unacceptable risk of gross corruption. The Ethics Council’s investigations revealed that the company was linked to several corruption allegations or suspicions in multiple countries between 2004 and 2021. The oil fund owned NOK 90 million worth of shares in the company [[3]].
Tianjin Pharmaceuticals Da Re Tang Group was excluded due to the unacceptable risk of contributing to serious environmental damage. The company produces traditional Chinese medicine, which includes animal parts from globally endangered species such as leopard bones, pangolin shells, and musk from musk deer. This can contribute to the illegal trade of these species and increase the risk of their extinction. The oil fund owned shares worth NOK 22 million in the company.
Larsen & Toubro and General Dynamics were excluded due to their production of key components for nuclear weapons. Larsen & Toubro was involved in building India’s strategic submarines, while General Dynamics was involved in the construction of the US’s strategic submarines. At the end of 2023, the oil fund owned NOK 4.92 billion worth of shares in Larsen & Toubro and NOK 7.2 billion worth of shares in General Dynamics.
Prosegur Compania de Seguridad SA was excluded due to the unacceptable risk of contributing to serious and systematic human rights violations. The company operates security services in several countries in Latin America and has been accused of violence that can endanger life and health, as well as violations of the rights of tribal people in Brazil. The oil fund owned NOK 72 million worth of shares in Prosegur.
Turning Point Brands was excluded because the company produces tobacco or tobacco products. At the end of last year, the oil fund owned NOK 15 million worth of shares in the company.
Ethical Exclusions Policy
Norges Bank’s ethical exclusions policy is designed to ensure that the oil fund’s investments are aligned with ethical standards. Companies may be excluded or placed under observation if there is an unacceptable risk that the company contributes to or is responsible for gross corruption, serious environmental damage, or serious and systematic human rights violations, among other issues [[1]]. The executive board of Norges Bank assesses each company’s situation and decides whether exclusion is necessary.
Precedent for Exclusions
This is not the first time that Norges Bank has excluded companies from its investment portfolio. In 2019, the bank revoked the exclusions of several companies, including Grupo Carso SAB de CV, General Dynamics Corp, Nutrien Ltd, Rio Tinto Ltd, and Rio Tinto Plc, following a review of their practices [[2]].
Conclusion
The recent exclusions of several companies from Norges Bank’s oil fund highlight the importance of responsible investment practices. By excluding companies that violate ethical standards, Norges Bank is sending a strong message about the importance of corporate social responsibility. As investors, it is essential to consider the ethical implications of our investments and to promote sustainable and responsible business practices.
References:
Norges Bank Investment Management
Ethical Exclusions: Companies Blacklisted by Norges Bank’s Oil Fund
Norges Bank’s oil fund has recently excluded several companies from its investment portfolio due to ethical concerns. The companies in question are China State Construction Engineering Corp Ltd., Tianjin Pharmaceuticals Da Re Tang Group, Larsen & Toubro, General Dynamics, Prosegur Compania de Seguridad SA, and Turning Point Brands. The
