Norway Fund Excludes Norilsk Nickel
By Meera Bhatia and Josiane Kremer
Bloomberg
Norway excluded Russia’s GMK Norilsk Nickel from its sovereign wealth fund, saying the world’s largest producer of the metal is contributing to extensive environmental damage. “Emissions from the company are the direct cause of forest death and other serious, visible damage to the natural environment in the Norilsk area,” Norway’s Finance Ministry said Thursday in an e-mailed statement. “This is deemed to be in breach of the ethical guidelines for the fund.” The oil fund is Europe’s largest stock investor and has holdings in about 7,900 companies worldwide. The Finance Ministry decides what companies to exclude based on recommendations from an ethics council. Before Thursday, it had dropped 28 companies, including Wal-Mart Stores. A decision to ban a company is made public after shares are sold. Norilsk spokeswoman Erzhena Mintasova couldn’t be immediately reached for a comment. The shares fell 141.91 rubles, or 3.3 percent, to 4,104 rubles in Moscow, valuing the company 782 billion rubles ($26.2 billion). High emissions of sulfur dioxide and heavy metals from Norilsk’s activities on the Taymyr Peninsula, located in the Arctic in Siberia, have caused “extensive, lasting damage” on the vegetation and waters, the Finance Ministry said. Norway, the world’s six-largest oil exporter, divested its holding as of Oct. 31 after a decision on Aug. 31. The $442 billion fund, the world’s second-largest sovereign wealth fund, set up an ethics council in 2004 to ensure it doesn’t invest in companies with activities that breach human rights, involve corruption or create environmental damage. As of the end of last year, the fund held 0.39 percent of the shares in Norilsk. The Finance Ministry said Norilsk acknowledged that the environmental damage is “severe” and that “a speedy and effective solution of the environmental problems was impossible without shutting down operations for a lengthy period,” according to the statement.
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