Massive Sovereign Wealth Fund of Norway Sells Out of BAE Systems

The massive $1.1 trillion (£777bn) sovereign wealth fund of Norway has pulled its investment in BAE Systems, a UK defence company, as it proceeds with an ethical push.

The fund has traditionally focused on oil.  However, it decided to ditch gas and oil investments in 2017. It has also sold off its stake in other eight companies as a part of the principles drive of the fund.

The fund said that it had decided to exclude US engineering firms AECOM and Fluor Corp, shipbuilder Huntington Ingalls Industries, and London-listed BAE Systems due to their involvement in the production of nuclear weapons.

However, the said news did not go down well with the people of the market. In a column that was published in the Wall Street Jounal, Orde Kittrie, an Arizona State University law professor, criticised the fund for blacklisting companies which help produce the nuclear weapons of the United States. He pointed out that Norway is a Nato member and it relies on these very weapons for its defence.

Shipping companies such as Korea Line Corp, Evergreen Marine Corp, Thoresen Thai Agencies, and Precious Shipping were also given the shove because of “the risk of severe environmental damage and serious or systematic violations of human rights.”

The Pan Ocean Co. of South Korea was put under review for the same reasons, while Atal, a Polish residential developer, was excluded because of the risk of human rights violations.

The said decisions were made by the executive board of the fund, on the recommendation of the fund’s Council on Ethics. It said that it did consider whether there were better means to address the problems that it saw, including exercising ownership rights in order to make a change. However, in these cases, it concluded that it was not appropriate.

The fund is managed by Norges Bank. It has now excluded over 100 companies including names such as Wal-Mart, Airbus, and Serco.