Norges Bank, Norway's central bank and the wealth fund's manager, decided to revoke the exclusions of five companies from the country’s sovereign fund – the Government Pension Fund Global, the bank announced on Tuesday.
The five companies are Grupo Carso SAB de CV, General Dynamics Corp, Nutrien Ltd., Rio Tinto Ltd., Rio Tinto Plc., Walmart Inc. and Wal-Mart de Mexico SAB de CV.
The Executive Board’s decision to revoke the exclusions were made on the basis of recommendations from the Council on Ethics, which regularly assesses the basis for observation or exclusion of such companies.
A decision to revoke a company's exclusion implies that the fund is again allowed to invest in the companies.
Grupo Carso SAB de CV was excluded from the fund in 2011 due to tobacco production. The company made it clear to the Council on Ethics that it is no longer involved in tobacco production.
General Dynamics Corp, which was excluded in 2005 due to the production of cluster munitions, clarified to the ethics council that such production has been terminated.
Nutrien Ltd. was excluded in 2011 after an assessment of the risk of violations of fundamental ethical norms related to the company’s operations in Western Sahara. The Council found that these purchases have now ceased.
Rio Tinto Ltd. and Rio Tinto Plc. were excluded in 2008 based on an assessment of the risk of severe environmental damage related to the Grasberg mine in Indonesia. The company made it clear for the Council on Ethics that it signed an agreement to sell its interest in the mine.
Walmart Inc. and Wal-Mart de Mexico SAB de CV were excluded in 2006 based on an assessment of serious or systematic violations of human rights. The Council on Ethics has found that the grounds for exclusion are no longer present.
In line with the management mandate, the Ministry of Finance decides when the securities will be re-introduced in the fund’s benchmark index.
"Re-introduction into the benchmark index will take place within an appropriately long timeframe. If and when share purchases will take place is left to Norges Bank to decide," the fund manager said.
By Murat Temizer