Norway has announced that its sovereign wealth fund will add four large Asian companies to its list of excluded companies - companies in which it will not invest - for the damage that their palm oil activities cause to tropical rainforests. The country's sovereign wealth fund is the world's largest (worth around $1 trillion USD) and controls 1.3% of all stocks worldwide. It is managed by over 50 managers and invests primarily in Europe, North America, and Asia and Oceania. Specifically, the Norwegian sovereign wealth fund will no longer invest in Posco (produces steel), Daewoo International (a subsidiary of Posco), Genting (casinos and resorts), and IJM (construction, palm oil plantations, infrastructure, property development/management).
This decision was made by Norges Bank (the Norwegian Central Bank) on the recommendation of the Council of Ethics (CoE), appointed by the Ministry of Finance. The Council of Ethics makes recommendations based on a set of Guidelines for Observation and Exclusion of Companies from the Government Pension Fund Global, which was adopted by the Ministry of Finance in 2014. The four companies above have been added to a list of over 50 other companies that are to be excluded from investment. Norway has also divested from companies for their involvement in: anti-personnel landmines, the production of cluster munitions, the production of nuclear arms, the production of tobacco, serious or systematic human rights violations, severe environmental damages, violations of the rights of individuals in situations of war, and "other particularly serious violations of fundamental ethical norms". Notably, at least two Canadian extractive companies are on Norway's list of excluded companies: Potash Corporation of Saskatchewan (added 6 December 2011 for violations of "fundamental ethical norms") and Barrick Gold Corp. (added 30 November 2008 for severe environmental damages).
This recent decision to divest is based on warnings issued by the CoE. Norway's sovereign wealth fund previously had almost $300 million USD in investments in these four companies.
- Posco and Daewoo: CoE warning issued over the conversion of tropical forest into palm oil plantations in West Papua, Indonesia. Posco has a controlling interest (over 60%) in Daewoo and Daewoo, in turn, owns 85% of the Indonesian plantation company, PT BIA, that is converting rainforest to palm oil plantations. Plantation development began in 2012 and is expected to be finalized in 2018. The Norwegian sovereign wealth fund owned 0.9% of Posco (worth $198 million USD at the end of 2014) and 0.3% of Daewoo ($9 million USD).
- Genting: CoE warning issued for the development of palm oil plantations in Indonesia. The Norwegian sovereign wealth fund owned 0.4% of Genting ($41 million USD).
- IJM: CoE warning issued regarding the development of palm oil plantations in Indonesia by IJM's subsidiary, IJM Plantations. The Norwegian sovereign wealth fund owned 1.6% of IJM ($46 million USD).