KLP Exclusion List Grows, Saudi Aramco Named

Posted on 12/28/2023

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Norway’s largest pension company Kommunal Landspensjonskasse (KLP) and the KLP Mutual Funds (KLP) have decided to exclude several companies from its investment universe on the basis of what it says was a due diligence assessment of companies listed on stock exchanges in Saudi Arabia, Qatar, the United Arab Emirates, and Kuwait (the Gulf States). KLP has excluded 11 of these companies because it considers that there is an “unacceptable, sector-specific risk of contributing to human rights abuses.”

KLP explains: “The excluded companies operate in the building and construction, property and telecommunications sectors. In addition, one company has been excluded on the basis of its close ties to a dominant state owner, combined with an active position in violation of KLP’s expectations with respect to climate change mitigation and energy transition plans.”

KLP is not refusing to invest in the Gulf States as a whole: “Companies in the Gulf States may now be included in KLP’s portfolios, with the exception of the excluded companies listed: Saudi Aramco, Emirates Telecom, Saudi Telecom, Emaar Properties, Aldar Properties, Etihad Etisalat, Mobile Telecommunications Kuwait, Dar al Arkan Real Estate, Ooredoo, Mobile Telecommunications Saudi Arabia, Mabannee, and Barwa Real Estate.

Earlier this year other companies were excluded. Senior Analyst with KLP, Kiran Aziz, said: “Our assessment is that there is unacceptable risk that the excluded companies contribute to violations of human rights in war and conflict situations through their affiliation with the Israeli settlements in the occupied West Bank. This is supported by the rules concerning occupation in the Hague Regulations and the fourth Geneva Convention. We always want to engage in dialogue with the companies in order to influence them through our ownership. When our influence failed to yield results, we chose to exclude the companies.