2023-12-28T14:09:58+00:00
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/ Bloomberg newspaper reported on Thursday that the manager of the largest pension fund in Norway withdrew investments amounting to $15 million from Gulf companies, and also decided to exclude Saudi Aramco.
The Norwegian Pension Fund, which supervises $70 billion, has included dozens of companies in Saudi Arabia, Qatar, the Emirates and Kuwait on the blacklist in which it does not invest, explaining that its doing so comes due to its fears that Gulf companies may facilitate human rights violations, while excluding Aramco. Related to climate risks.
The excluded companies include institutions in the real estate sector, and KLB says migrant workers from Africa and Asia face discrimination and human rights violations. The pension fund also targeted the telecommunications sector, citing the development of artificial intelligence as enhancing the risks of surveillance and censorship in the region.
“Gulf countries continue to be characterized by authoritarian regimes that restrict freedom of expression and political rights, including the freedom of critics and human rights activists,” KLB Chief Responsible Investment Officer Kiran Aziz said in a statement.
The performance of blacklisted stocks varied on Thursday, with some rising alongside their counterparts in emerging markets, while others declined. Aramco shares fell, tracking the fall in oil prices overnight.
Overall, foreign investors have less exposure to GCC markets – which make up just over 7% of the MSCI Emerging Markets Index – due to smaller free floats and newer inclusions in the index.
KLB manages public sector pensions, including Norwegian municipalities, and describes itself as a responsible investor willing to divest from companies for environmental, social and governance reasons. In recent years, he has targeted Adani Green Energy Ltd. Due to concerns that it had inadvertently helped finance polluting activities through its share; as well as US-based companies that oversee refugee centers linked to human rights violations; And companies linked to Israeli settlements in the West Bank.
A source from KLB said that the withdrawal of investments from Aramco was mainly due to the fact that the oil and gas producing company’s energy transformation plan did not meet expectations. The pension fund said that it found that dealing with companies in the Gulf countries was fruitful, but added that it is difficult for shareholders to influence Aramco because it is mostly state-owned.
KLP concluded by noting that the liquidation amount of $15 million would have been worth about $27 million if its investments had more closely matched the index’s weighting of stocks.