Norwegian pension fund Kommunal Landspensjonskasse (KLP) has excluded three companies for violations of human rights and involvement in the coal and tobacco sectors.
Based on recommendations made by the Council on Ethics – the advisory body for Norway’s sovereign wealth fund – the NOK675.6bn (€69.6bn) pension provider excluded Texwinca Holdings, Washington H Soul Pattinson & Co (WHSP) and Turning Point Brands.
KLP said it had only been invested in two of the three companies when the decision was put into effect on 13 March: it owned a stake worth around NOK2.9m in WHSP and roughly NOK96,700 in Texwinca Holdings.
Norway’s NOK8.9trn sovereign wealth fund also had investments in Texwinca and WHSP but divested from them in January.
KLP said it blacklisted the Hong Kong-based Texwinca, which produces fabrics for the apparel industry, after discovering systematic violations of human rights in its factories in Vietnam.
It also cut its holdings in Australian investment company WHSP and US tobacco firm Turning Point Brands due to the companies deriving revenue from coal and tobacco respectively.
KLP said that, while it was not obliged to follow recommendations made by the Council on Ethics on the exclusion of companies, it usually did.
“The assessment made by the Council on Ethics is thorough and well-documented, and we see no reason to deviate from it. The openness of Norges Bank and the Council on Ethics on which companies they exclude is important,” said Marte Siri Storaker, adviser for responsible investments at KLP’s investment arm, KLP Kapitalforvaltning.
She added: “The companies are experiencing greater pressure to clean up when more investors are clear on which guidelines they have to deal with.”