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World's biggest sovereign fund ejects Chinese company

  • News Desk

    Agence France-Presse

Oslo, Norway   /   Thu, January 17, 2019   /   07:38 pm
World's biggest sovereign fund ejects Chinese company Oystein Olsen, Governor of the Central Bank of Norway (Norges Bank), presents the annual report of the Norwegian Government Pension Fund in Oslo on February 27, 2018. Norway's sovereign wealth fund, the world's biggest, yielded returns of 1.02 trillion kroner (106 billion euros, $131 billion) in 2017, a record sum thanks to soaring global stocks, the Norwegian central bank said. At the end of the year 2017, the fund was worth a whopping 8.488 billion kroner (almost 880 billion euros or $1.08 trillion). (AFP/Ole Berg-Rusten / NTB Scanpix )

Norway's sovereign wealth fund, the world's biggest, has excluded a Chinese company from its almost $1 trillion portfolio because of human rights violations, the Norwegian central bank said on Thursday.

Yarn, fabric and apparel manufacturer Texwinca is the main shareholder in Megawell Industrial, which has been criticised for working conditions at its factories in Vietnam.

The Council on Ethics, which makes recommendations to Norway's central bank which runs the fund, cited as concerns the discrimination of female workers, health and safety risks at the factories, and restrictions on the right to form unions.

The central bank concluded there existed an "unacceptable risk that the company is responsible for serious or systematic human rights violations."

According to the latest available data, the Norwegian fund held 1.01 percent of Texwinca at the end of 2017, worth $7.7 million.

The fund, which has holdings in some 9,000 companies around the world as well as bonds and real estate, is governed by ethical guidelines laid down by parliament.

These bar it from investing in, among other things, companies that commit serious human rights violations, manufacture nuclear or "particularly inhumane" weapons, or those in the coal and tobacco industries.

The central bank also announced Thursday that it was excluding the coal-based energy companies Evergy of the US and Washington H. Soul Pattinson of Australia.

Fuelled by Norway's state oil and gas revenue, the Government Pension Fund Global is currently worth 8.4 trillion kroner ($983 billion, 860 billion euros).