New Delhi: Norway’s sovereign wealth fund has decided to exclude Adani Ports & Special Economic Zone Ltd from its portfolio following recommendations from the country’s Council on Ethics, The Wire reported citing Bloomberg.
The decision, announced by Norges Bank Investment Management, is linked to “unacceptable” risks from human rights violations in war and conflict zones.
US-based L3Harris Technologies Inc. and China’s Weichai Power Co. are also excluded due to concerns regarding their involvement in military equipment sales to Russia and Belarus.
Norway’s sovereign wealth fund, which is valued at $1.7 trillion, is considered to be the world’s largest single sovereign wealth fund on account of total assets under management.
“NBIM has had billionaire Gautam Adani’s logistics and transportation firm ‘under observation’ since 2022, originally due to its involvement in a port terminal in Myanmar. The company sold that port project last year. In a separate statement, Norway’s Council on Ethics noted that ‘no information on the buyer is available,’ making it impossible to ascertain whether Adani still has ties to the division,” the report was quoted as saying.
The Council on Ethics reportedly said: “In a situation in which extremely serious norm violations are taking place, this constitutes an unacceptable risk.”
Though ESG investors usually avoid aerospace and defence firms and their suppliers, the surge in stock prices following Russia’s invasion of Ukraine made some ‘portfolio managers to reassess the sector,’ according to the report.
Though majority of ESG fund managers distance themselves from these investments, over 1,000 ESG funds had invested in these stocks leading to nearly 25 per cent spike since invasion.