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Norway excludes Adani Ports from Government Pension Fund Global over ethical concerns

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Norges Bank, the central bank of Norway, has excluded Adani Ports and Special Economic Zone (APSEZ) from its Government Pension Fund Global, over the ‘unacceptable risk’ the company contributes to human rights violations during the times of war and conflicts. The Norwegian Government Pension Fund Global GPFG is one of the world’s largest fund, owning almost 1.5 percent of all shares in the world’s listed companies. It has holdings in around 9,000 companies worldwide.

Besides, two other companies – Weichai Power Co Ltd and L3Harris Technologies Inc – have also been excluded from the investment by the GPFG.

The decision to exclude APSEZ, which was announced on May 15, is based on a recommendation from the Council on Ethics of November 21, 2023, Norges Bank said in a statement. APSEZ, a part of the Adani Group, is a logistics company that engages, among other things, in the operation of ports and port services.

“The Council on Ethics recommends that Adani Ports & Special Economic Zone Ltd be excluded from investment by the Norwegian Government Pension Fund Global (GPFG) due to an unacceptable risk that the company is contributing to serious violations of the rights of individuals in situations of war or conflict,” Norges Bank said. The company has been under observation since March 2022, but that observation now ends given the exclusion decision, it said. In May 2023, APSEZ disclosed that it had sold its port-related operations in Myanmar to Solar Energy Ltd. No information on the buyer is available, and APSEZ has stated that it cannot share any such information on the grounds of confidentiality, the statement said.

“Lack of information means that the Council cannot establish whether APSEZ has links to the enterprise concerned. In a situation in which extremely serious norm violations are taking place, this constitutes an unacceptable risk that the GPFG’s investments in APSEZ may breach its ethical guidelines,” it said.

Festive offer

Adani Ports’ shares ended at Rs 1,344.75 apiece, up 0.56 per cent, on the BSE.

The Government Pension Fund Global was established after Norway discovered oil in the North Sea. The fund was set up to shield the economy from ups and downs in oil revenue. While investing in companies, the fund considers environmental and social issues. The fund itself may also decide to divest from companies that impose substantial costs on other companies and society as a whole, and so are not considered long-term sustainable. As per the Norges Bank Investment Management website, the fund held 0.24 per cent stake in Adani Ports at the end of December 2023. The fund is invested in a few other Adani group entities as well. Adani Ports did not respond to a request for comment till press time.

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