In December, KLP – which covers staff at the country’s municipalities – sent its in-house adviser on responsible investments Annie Bersagel to North Dakota to assess the situation on the ground.
Jeanett Bergan, head of responsible investment at KLP, said the fund had to be able to document serious or systematic violations of environmental or human rights in order to remove a firm from its portfolio. In the case of the companies behind the US oil pipeline construction, the pension fund had been unable to find such evidence.
“Companies involved could clearly have handled indigenous rights in a better way, but it is difficult for us to see that matter as sufficiently grave or systematic,” Bergan said.
KLP has NOK423m invested in firms involved in the project: Phillips 66, Enbridge, Energy Transfer Partners, and Marathon Petroleum. Campaigners against the pipeline have argued that its current route will be damaging to wildlife and will run through a Native American territory.
KLP said the reason it had a practice of proven and public justifications for exclusion was to have as big as possible an effect on companies and make sure its process was always credible and thorough.
Bergan added: “Our policy on the exclusion of companies from investments has a high threshold and level of severity for excluding a company.”
Meanwhile, Storebrand, which sells pensions, life insurance and savings products in Norway and Sweden, said it would exit positions in Marathon Petroleum, Enbridge, and Phillips 66.
Matthew Smith, head of sustainable investments at Storebrand, said: “We have come to the conclusion that active ownership is not going to deliver a better outcome, and after an overall assessment of the situation, we have decided to sell these positions.”
The company said there was too much uncertainty for it as an investor as to whether there had been a good process that ensured the rights of all parties in the conflict.
Smith said: “Generally, it is our belief that we can have a more positive effect on companies and situations by using our position as an owner to affect change.”
The firm had done this successfully many times, but it did not always work, he added.
Storebrand said it had been in direct contact with the companies, and had worked with international groups of investors.
“Our most recent initiative is an investor letter, representing 137 investors with $653 billion assets under management, that encourages involved banks that have lent money to the project to use their position and influence to engender positive change and a reconsideration the routing of the pipeline,” Smith said.
Smith added that the company hoped its divestment would give a final signal to the companies involved in the pipeline to think again about the pipeline’s routing.
Last month, Nordic banking and investment group Nordea announced it had decided to divest from companies behind the pipeline project.
The London Pension Fund Authority was criticised last month for holdings in companies linked to the Dakota pipeline, but is in the process of selling these as part of an unrelated change of fund manager.