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2015: Norway Divested from 73 Companies

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Norway’s Government Pension Fund Global (GPFG) recently issued its annual responsible investment report revealing they divested from 73 companies in 2015 following an assessment of environmental and social risk factors. The divestment decisions are made by the manager of the fund, Norges Bank Investment Management (NBIM). NBIM uses its guidance under the management mandate. In 2015, NBIM divested from 16 companies involved with coal-fired power generation.

Asset owners are looking at carbon-stranded assets looking to possibly exclude them from their portfolios. The board of the California State Teachers’ Retirement System (CalSTRS) voted to divest from U.S. companies that produce coal for energy generations. The exposure was about US$ 1.5 million for the pension giant. Sharon Hendricks, chair of the investment committee at CalSTRS issued a statement, “We determined that given the financial state of the industry, the movement of the regulatory landscape and coal’s impact on the environment, its presence reflects a loss of value.”

Hendricks added, “We will now move ahead to determine the fiduciary appropriateness of non-U.S. thermal coal companies in the CalSTRS portfolio and make an additional decision based on those findings.”

Top Areas of Company Divestment – NBIM 2015 Data

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Oman SGRF Contemplates $1 Billion Infrastructure Fund

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Oman’s State General Reserve Fund (SGRF) is in discussions on forming a US$ 1 billion infrastructure fund. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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Norway’s GPFG Banned from Investing in 9 Companies Over Nuclear Weapons

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The recent false alarm caused by a state employee in Hawaii (who was not terminated and reassigned to a new position), triggering the Emergency Alert System message at 8:07 a.m. caused pandemonium in the state. After decades of failure in diplomacy between the United States and North Korea, the threat of a nuclear missile attack has grown since. The states of Alaska and Hawaii are the closest states to North Korea.

Besides the recent news in the world of nuclear missiles, Norges Bank oversees the management of the country’s sovereign wealth fund. The central bank has moved to ban nine companies from the Government Pension Fund Global. In addition, one company has been placed under observation. The Executive Board of Norges Bank’s decisions on exclusion were made on the basis of recommendations from the Council on Ethics. However, before moving to exclude a company, the central bank may consider other options, such as the exercise of ownership rights. In these instances of companies, the board determined that it was appropriate to use other measures in these cases.

The Council on Ethics’ recommendations to exclude:
Risk of severe environmental damage and serious or systematic violations of human rights
Evergreen Marine Corporation (Taiwan) Ltd
Korea Line Corporation
Precious Shipping PCL
Thoresen Thai Agencies PCL

Unacceptable risk of serious or systematic violations of human rights
Atal SA

Over involvement in the production of nuclear weapons
AECOM
BAE Systems
Fluor Corporation
Huntington Ingalls Industries Inc
Honeywell International Inc (already previously excluded)

Placed Under Observation
Pan Ocean Co. Ltd

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Sistema to Pledge Assets to Help Fund Settlement

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The Russian Direct Investment Fund (RDIF) is helping a settlement situation between two Russian economic powerhouses. In January 2018, Sistema, under a settlement, is mandated to pay Bashneft oil company, which is owned by energy behemoth Rosneft, 100 billion roubles (US$ 1.8 billion) by March 30, 2018.

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