Norway's Wealth Fund Pulls Investment from Gulf Companies
Norway's sovereign wealth fund, the largest in the world, will divest from companies in Saudi Arabia, UAE, and Kuwait over human rights risks.
Jordan Taylor
- 2023-12-28
- Updated 08:11 AM ET
(NewsNibs) - Norway's sovereign wealth fund has announced that it will cease investing in a number of companies based in Saudi Arabia, the United Arab Emirates, and Kuwait. The decision follows concerns over human rights violations, leading to the fund stepping away from over a dozen entities with combined assets of $15 million, according to Reuters. The move will affect 12 companies in total, across various sectors including oil, real estate, and telecommunications, with Saudi Telecom among the notable names on the exclusion list.
Concerns Over Surveillance and Censorship
The decision by KLP, which manages $1.3 trillion in assets, was partly taken in response to the role of telecommunications companies in surveillance and censorship activities, exacerbated by the development of artificial intelligence. This includes their complicity in limiting freedom of expression and infringing on political rights. Moreover, the oil giant Aramco is being excluded for its inadequate response to climate change, particularly its lack of comprehensive plans for mitigating its impacts and transitioning to cleaner energy sources.
Exploitation in the Real Estate Sector and Government Scrutiny
Real estate companies in the region were also part of the divestment, with accusations centered around the exploitation and discrimination against migrant workers from Asia and Africa. Meanwhile, Saudi Telecom's expression of interest in purchasing Altice Portugal has caught the attention of the Portuguese government, which has stated it will review the potential deal should it be formalized. Companies still listed for investment from the Gulf regions are expected to remain under close scrutiny, as indicated by Kiran Aziz, the head of the responsible investment department who signed off on the statement.
The divestment reflects ongoing global concerns surrounding human rights and the environment. KLP's position underscores a trend among large asset managers to hold companies to account for their societal and environmental impacts. As governments and institutions continue to foster responsible investment practices, the Gulf states' human rights records, and other criticized policies are likely to face increasing international scrutiny.
