Norway’s $70B Pension Fund Blacklists Dozens of Gulf Companies

Norway’s largest pensions manager, KLP, has blacklisted a dozen Gulf companies listed in Saudi Arabia, the United Arab Emirates, Qatar and Kuwait on concerns they may facilitate human rights violations and also divested from Saudi Aramco due to climate risks, Bloomberg reports. 

KLP, which oversees $70 billion in global investments, has excluded companies in the real estate sector on claims that migrant workers from Africa and Asia have faced human rights violations and discrimination and has also targeted the telecommunications sector on grounds that the development of artificial intelligence (AI) increases the risk of surveillance and censorship in the region.

“Gulf states remain characterized by authoritarian systems of government that restrict freedom of expression and political rights, including of critics and human rights activists,” Kiran Aziz, KLP’s head of responsible investment, has said in a statement.

Norway is one of the most controversial countries in Europe when it comes to energy policy. 

On one hand, the Nordic country boasts one of the most advanced oil and gas industries in the world, a role it has fully embraced in recent years by becoming the largest exporter of natural gas to Europe following Russia’s invasion of Ukraine. On the other hand, Norway boasts some impressive ESG stats, with nearly 90% of all new vehicles sold in the country in 2022 being electric.

And, Norway’s financial institutions don’t seem to shy away from flexing their ESG muscle: back in May, Norway’s giant sovereign wealth fund lent its support to ExxonMobil Corp. (NYSE:XOM) and Chevron Corp. (NYSE:CVX) shareholders in their bid to introduce emissions targets. Norway's wealth fund is the largest in the world, with ~$1.4 trillion in assets. It’s also a major backer of oil and gas with $37 billion, or 5.9 percent of its total equity investments, invested in fossil fuel interests. The fund owns the sixth-largest stake in Exxon. However, earlier in the year, the wealth fund took large chunks of profits in oil and gas after a big runup in energy prices, effectively reducing its stakes.

By Charles Kennedy for Oilprice.com

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