Alternative Investments/ESG: Norwegian Sovereign Wealth Fund Norges Bank Places Nine More Companies on ESG Blacklist

The $ 1.2 trillion fund axed companies in the fields of tobacco, recreational cannabis production, and which caused environmental damage.

Norges Bank is Norway’s central bank and also manages its $ 1.2 trillion Government Pension Fund Global. As a part of its governance procedures, the pension funds Council on Ethics periodically reviews the portfolio to identify companies that would qualify for exclusion under its strict climate guidelines. Based on recommendations from this council, Norges Bank has placed another nine companies on its exclusion list for investment. (CIO)

Excluded Companies

Norges Bank has placed the following nine companies on its exclusion list:

Production of cannabis for recreational use

· Aurora Cannabis Inc. (NASDAQ: ACB)

· Canopy Growth Corp. (NASDAQ: CGC)

· Cronos Group Inc. (NASDAQ: CRON)

· Tilray Brands Inc. (NASDAQ: TLRY) ,

Production of tobacco or tobacco products

· Denmark’s Scandinavian Tobacco Group (CPH: STG)

· Egypt-based Eastern CO SAE

· Indonesia’s Hanjaya Mandala Sampoerna (IDX: HMSP)

Severe environmental damage

· Indian state-owned hydropower company NHPC Ltd. (NSE: NHPC)

· Korean zinc smelter Young Poong Corp (KRX: 000670)

The Council said these two companies were excluded “due to unacceptable risk that the companies contribute to severe environmental damage.”

The council said that NHPC Ltd was creating a dam project in India that could flood an approximately 12 sq miles of a very biodiversity-rich area comprising forests where new species had recently been found to the west of the project. According to the Council, the dam would result in destructive environmental impacts, causing harm to the endangered Ganges River Dolphin as well as presenting a safety hazard to people along the river.

Regarding the Korean zinc smelter Young Poong, the council said it could be linked to “serious persistent and ongoing pollution” that included the emission into the air of heavy metals such as lead, arsenic, zinc, sulphur dioxide, and cadmium. It alleged that the smelter had caused serious pollution as well as harm to both the environment and human health for many years.

Earlier, Norges had outlined a 2025 climate action plan that would support portfolio companies to achieve net zero emissions by 2050. The fund manager expects all companies included in its portfolio to set net zero 2050 targets by 2040 at the latest.

According to the plan, “the climate risk of the fund reflects the climate risk of the global economy,” given that its portfolio included more than 9,000 companies across 70 countries.

Related Story: Morgan Stanley To Debut In ETFs With Four ESG Equity Funds

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