Norway’s wealth fund has excluded a firm from its investment portfolio over fears of the environmental impact of one of its projects.
The $935-billion Norwegian fund, the world’s largest, no longer invests in firms that it feels breaches certain ethical guidelines.
These include production of nuclear weapons, tobacco and landmines.
Bharat Heavy Electricals has now been excluded from the fund’s portfolio because of concerns over the environmental impact of a plant the Indian company is building, the Norwegian central bank said.
BHEL, an engineering and manufacturing company, is majority-owned by the government of India.
It’s stock was excluded from the Norwegian fund’s portfolio because of “the risk of severe environmental damage” resulting from the building of a coal-fired power plant close to the Sundarbans, the world’s largest mangrove forest, in Bangladesh, the fund’s ethics watchdog said in a statement.
This is an area with “universally unique environmental qualities” the Council on Ethics said, adding that “there is an unacceptable risk of the company contributing to or being responsible for severe environmental damage”.
The Council on Ethics makes recommendations to the board of the central bank, which then decides whether to follow them through and instructs the fund’s management to take action. The fund is managed by a unit of the central bank.
The fund has sold all its holdings in BHEL, which it did ahead of the publication of the decision. The fund did so gradually so as not to alert market participants.
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