Norway pension fund steps up ethical investment policy

The Norway sovereign wealth fund, the largest in the world with assets of $810 billion (£485 billion), recently excluded a mining company from its portfolio because of its parent company’s operations.

Sesa Sterlite, an India-focused subsidiary of mining conglomerate Vendanta Resources, which itself was excluded from the pension fund in 2007, was recommended to be excluded by the Council of Ethics. They cited exclusion on ethical grounds, saying Vedanta’s “relevant operations in India, which are run through the company Sesa Sterlite, present an unacceptable risk of environmental damage and serious violations of human rights.”

According to Solaron, Vedanta has been involved in a series of human rights and environmental violations in recent years, including failing to consult with and disclose information to affected communities and inefficient environmental compliance, in India. It has also been reported that the company has plans to forcefully relocate residents in Bicholim, Goa, where the company had been mining within a kilometre of residential houses.

The accusations and action taken by the Norway pension fund highlight the need to fully consider a business’ operations when considering investing. Several other institutional investors, including the Church of England and the Joseph Rowntree Charitable Trust, have excluded Vendanta in the past.

The pension fund’s actions come as Norway’s parliament considers a motion to ban the fund from investing in coal firms because of environmental concerns.

Further reading:

Major pension fund Storebrand divests from a further 10 fossil fuel firms

$800bn Norwegian oil fund under pressure to divest from coal

Norway central bank could become responsible for $800bn oil fund’s ethics

$800bn Norwegian oil fund under pressure to divest from coal

Norway pension fund divests from ‘financially worthless’ fossil fuel firms