KLP bans 27 big namesFebruary 2003
One of Norway’s largest institutional investors has excluded 27 companies from its portfolio after setting a ‘minimum ethical standard’ for all its investments.
KLP, which has assets of more than NKr110billion ($16bn, £10bn), announced last month that it will disinvest from a number of large companies, including ChevronTexaco, Coca-Cola, DuPont, ExxonMobil, Goodyear, and Sears, because they have failed to meet the standard, which is based on United Nations declarations on human rights, labour standards and the environment.
The firms will initially be excluded for five years, but may be reinstated if they can establish, ‘through an independent third party’, that their social and environmental performance has improved. An updated list of companies excluded will be published twice a year.
KLP, which is mutually owned and runs funds for 362 local authority clients, as well as 2500 companies linked to the public sector, says the standard has been designed to introduce ‘a clear and structured policy on social responsibility which is in line with our corporate values and customer preferences’ – and on the basis that good CSR performance ‘is essential to ensure high quality analysis and healthy returns’.
It has published details on its website of why it has decided to boycott the 27 companies. It raises concerns, for instance, about ChevronTexaco’s use of local security forces in Nigeria to protect its installations. It links Coca-Cola to ‘anti-union dismissals and grave violations of human rights’ in Guatemala, and is avoiding investment in DuPont because of alleged environmental damage caused by the fungicide Benlate.
Analysis of companies is being carried out by the Swedish-based SRI research provider CaringCompany-Etikanalytikerna, and the CoreRatings agency.
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