NORWAY – Asset manager KLP has excluded 27 companies – including European heavy-hitters such as Nestle, Unilever, Siemens and TotalFinaElf – on ethical grounds, as part of a policy that it says is in line with corporate values and “customer preferences”.
The company, which manages 110 billion Norwegian kroner (15 billion euros) in assets, said in a statement that it applies a minimum standard to all its financial investments. “This entails that companies will be excluded based on United Nations reports on violations of human rights, labour rights and environmental conventions.”
“In addition to the minimum ethical standard, KLP will implement a methodology for in-depth analysis of Scandinavian companies on financial risks and opportunities relating to social responsibility and governance.”
KLP’s chief executive Bjorn Kristofferson said: “By implementing a minimum standard and actively working through analysis and engagement, we have the opportunity of influencing companies to improve on issues of social responsibility. This is essential to ensure high quality analysis and healthy returns.”
Each exclusion is based on UN principles, with analysis provided by ethical investment consultancy Caring Company-Etikanalytikerna. KLP will exclude each company for an initial five years, unless it can prove it has cleaned up its act. KLP has also signed up ethical ratings firm CoreRatings for “in-depth analysis and engagement”.
KLP first unveiled the policy in December, saying “the more capital to back up the model, the greater is our ability to influence positively”. It says Sjunde AP-fonden, Nordea, SEB, Folksam and Telia's Pension Fund also support the same model.
“Our strategy on social responsibility in the investment process is designed to encourage companies to improve,” KLP says. “In the longer term we can expect improved results. We believe that companies which take their social responsibility seriously will do better than those which do not.”
The excluded companies: