Chart: Norway wealth fund's India stock exclusions until Adani crisis

The world's largest sovereign wealth fund recently said it had no more investments in the crisis struck Adani Group. AsianInvestor takes a look at other Indian stocks the fund has removed from its portfolio since 2010.
Chart: Norway wealth fund's India stock exclusions until Adani crisis

Norways $1.4 trillion sovereign wealth fund, Government Pension Fund Global, recently said it sold its remaining shares in the Adani Group of companies it was hit by a short-seller report that alleged accounting fraud and other financial irregularities.

The Adani group has lost more than $100 billion in market capitalisation since the Hindenberg report was released on January 24.

“For all practical purposes, we have no exposure [in the Adani Group]," CEO Nicolai Tangen said in response to a reporter's question at a media conference on the fund's responsible investment report 2022 in early February.

The Norwegian fund has been divesting its shares in the group since a few years, other media reported.

The wealth fund, the world’s biggest, places great emphasis on being a responsible investor in its recently issued strategy plan for 2023-2025. 

ESG related concerns have led the giant SWF to drop large and well known companies such as Airbus, BAE Systems, Korea's Posco and Brazil's Vale in recent years.

The fund since 2010 has excluded about 15 companies out of India’s more than 6,800 companies listed on the main Bombay Stock Exchange and National Stock Exchange. Most of these have occurred to metals and mining entities, tobacco, energy, and defence companies.

The biggest set of exclusions on India stocks occurred in April 2016, after Norway’s Ministry of Finance introduced a criterion to allow the wealth fund to exclude companies when thermal coal accounted for a significant part of a company’s business activities.

Data source: NBIM. Infographic created using Canva.

The wealth fund deals with responsible investment and ownership at three levels:  at the market level to elevate global standards for all companies; at the portfolio level to monitor environment, social and governance information and integrate this into fund management; and at the company level to promote good governance and sustainable business practices.

Norges Bank is responsible for the management of the sovereign fund.

An independent Council of Ethics performs ethical evaluations of companies. The council sends its recommendations to Norges Bank’s executive board, which then makes the final decision on exclusion, observation or active ownership.






¬ Haymarket Media Limited. All rights reserved.