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Daily news…Doing business with Myanmar or selling spying equipment to countries who will use it to monitor journalists are two of the latest reasons companies might get excluded from ESG investment funds.
The December edition of IP&E Magazine, a globally-recognised pension fund publication, reports that the manager of Norway’s huge sovereign wealth fund (SWF) has announced it is excluding three companies from its portfolio on the grounds of risk to individuals’ and human rights.
The magazine reports that Norges Bank Investment Management (NBIM) has excluded three companies from the Government Pension Fund Global [GPFG], and end observation of one company.”
This type of ESG investment selection has been traditionally been known as a “negative screen”. Companies are excluded from being potential investments if they engage in behaviours or enterprises that the pension fund opposes. Other types of ESG funds apply “positive screens” to potential investments and may select companies on the basis of their positive contributions to human rights or environmental work.
Based on a recommendation from the GPFG’s Council on Ethics the Thai oil and gas company PTT PCL and its subsidiary PTT Oil and Retail Business PCL would be excluded from the fund “due to unacceptable risk that the companies contribute to serious violations of individuals’ rights in situations of war or conflict.”
The council’s published decision documentsaid the two firms were being banned because of cooperations with the Myanmar military junta.
Israeli firm Cognyte Software is also being blacklisted by NBIM, in this case due to selling surveillance services to countries linked to spying on journalists and regime opponents.
This blacklisting was also based on advice from the Council on Ethics, according to IP&E.
Several Cognyte customers had been accused of abduction, torture and other forms of abuse targeting vulnerable groups, including sexual minorities, according to the ethics panel.
The observation of Italian defence contractor Leonardo, which commenced in 2017 is being ended by NBIM on the view the firm is improving its anti-corruption work
In its recently-published three-year strategy plan, NBIM said that within its future responsible investment strategy it would sharpen its expectations on climate change as well as human rights.
What you can do
If you care about environmental justice, social justice and good governance you can put your money where your heart is.
The best place to start is with your superannuation, which all working Australians are required to invest in to save for their retirement. Even if the only contributions going into your superannuation are those paid by your employer, over time your investments can make a difference.
Ask you current superannuation fund about its ESG or ethical investment options. If it does not have a way tht you can apply a positive screen to select shares or funds that have positive environmental or social programs or a negative screen to avoid companies involved in pollution or human rights abuses, you can shop around.
