Norway sovereign wealth fund excludes BHEL from portfolio

Norway's sovereign wealth fund, the world's largest, has excluded India's state-owned Bharat Heavy Electricals Ltd (BHEL) from its portfolio based on its assessment of risk to environment.
BHEL has been excluded as it is building a coal-fired power plant in the Sundarbans, one of the world's largest mangrove forests in Bay of Bengal, the Norwegian central bank said today.
The Government Pension Fund Global has shares in some 9,000 companies around the world and its rules prohibit it from investing in companies that produce nuclear arms, tobacco, risk environmental damage, violate human rights and those which drive a large part of their business from coal.

"The Executive Board in Norges Bank has decided to exclude BHEL from the Government Pension Fund Global. The company is excluded based on an assessment of the risk of severe environmental damage," it said in a statement.
The exclusion, it said, was made on the basis of a recommendation from the Council on Ethics.
"The Executive Board has not conducted an independent assessment of all aspects of the recommendation, but is satisfied that the exclusion criteria have been fulfilled," it added.

The Council had originally recommended the exclusion on December 5 last year.
"The company is building a coal fired power plant close to areas with universally unique environmental qualities in the Sundarbans, the world's largest mangrove forest, in southern Bangladesh.

"The Council on Ethics finds that there is an unacceptable risk of the company contributing to or being responsible for severe environmental damage," the statement said.
The fund, worth an estimated 8.1 trillion kroner (USD 934 billion) also placed Chinese oil giant PetroChina Co Ltd and Italian aerospace group Leonardo SpA under observation over allegations of corruption.
"The Council on Ethics has recommended that PetroChina Co Ltd and Leonardo SpA should be excluded from the fund's investment universe, but highlights that the companies have taken measures against corruption.
"The Executive Board believes that these measures provide sufficient grounds to observe the development in the future," the statement said.