The central bank department running Norway’s giant sovereign wealth fund (SWF) has decided to go its own way in the handling of alleged human rights violations at companies partially belonging to a listed French holding firm in its portfolio – rather than following the advice from its own ethics council to ditch the stock.
Norges Bank Investment Management (NBIM), which manages the Government Pension Fund Global (GPFG), made a series of announcements late yesterday about its decisions on observation, exclusion and active ownership relating to its investments.
Regarding the linked companies Bolloré and Compagnie de l’Odet, the SWF manager said it had decided not to go with the Council on Ethics’ recommendation to exclude, but instead to engage with the firms to try to improve the behaviour.
At the end of December 2023, the NOK17.7trn (€1.55trn) GPFG held NOK858m of Bolloré shares, corresponding to a 0.46% voting share in the company, according to data on the Oslo-based institution’s website.
NBIM said its executive board had decided to ask it to follow up the companies Bolloré and Compagnie de l’Odet through the exercise of ownership rights.
“The Council on Ethics has recommended that companies be excluded due to an unacceptable risk that the companies contribute to or are responsible for serious human rights violations,” it said, referring to the conduct-based criterion in the SWF’s guidelines.
The basis for the council’s recommendation was “poor working conditions, gender-based violence and harassment on palm oil plantations in Cameroon and consequences for the local community”, NBIM said.
“The norm violations are related to the activities of the company Société Financière des Cautchoucs (Socfin), which has close links with Compagnie de l’Odet SE and Bolloré SE, and in which Bolloré SE is a significant shareholder,” it said.
NBIM said human rights were one of its priority ownership topics, and that companies should have policies to respect human rights in their own operations, in supply chains and in other business relationships – as well as adequate systems for detecting, preventing and managing human rights risks.
“Prevention of gender-based violence and harassment is a key part of this,” it said.
NBIM said its board had asked it to follow up the management of human rights risks, working conditions and sexual harassment with Compagnie de l’Odet and Bolloré for up to two years.
“Through its active ownership, Norges Bank will work to reduce the risk of future norm violations through improved systems and adequate value chain measures on the part of companies,” the manager said.
IPE has contacted a spokesman for Bolloré for comment.
KLP divests shares and bonds in Caterpillar
Separately, Norway’s biggest municipal pension provider, KLP, said yesterday it had divested NOK728m of shares and bonds in US company Caterpillar, blacklisting the firm “due to the risk of contributing to violations of human rights and international law in the West Bank and Gaza”.
KLP said it had been in dialogue with the company for several months over the issues, and had used its votes at the US firm’s 2022 and 2023 annual general meetings to push for Caterpillar to report on risks related to businesses in conflict areas.
But the US engineering and machinery company had not addressed risks linked to areas of conflict, it said.
Kiran Aziz, head of responsible investments at KLP Kapitalforvaltning (asset management), said: “Although Caterpillar has shown itself willing to engage in dialogue with KLP, the answers gave little credibility that they have taken good measures to reduce the risk of complicity in violations of human rights in war and conflict situations, as well as international law.”
IPE has contacted Caterpillar for comment today.
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