Norway's SWF Dumps Electrobras (Biggest Lat-Am Utility), Brazilian Mining Giant Vale From Holdings
Norway’s Government Pension Fund Global (GPFG) has excluded two of Brazil’s largest energy companies from its portfolio, the fund’s executive board said last week. The decision to divest from mining giant Vale and Eletrobras, Latin America’s largest utilities company, follows a recommendation by GPFG’s ethics council, which found that the two companies had violated the fund’s environmental and human rights rules. GPFG is the world’s largest sovereign wealth fund, with more than $1 trillion in assets. The fund also announced that it would no longer invest in five other companies that had either caused “severe environmental damage” or failed to adequately cut greenhouse gas emissions.
Rainforest Foundation Norway praised the move, saying it could “trigger a wave of divestment by investors internationally.” The GPFG had held a roughly 1% stake in the two Brazilian companies as of the end of 2018 before selling its positions in recent months. “We see that a lot of international capital is leaving Brazil currently because of the deterioration of public policies for environmental and human rights protections,” Vemund Olsen, senior adviser at Rainforest Foundation Norway, said in an interview with Mongabay.
Including the new additions, there are now 142 companies on GPFG’s exclusion list. The fund’s guidelines list a number of ways that companies can land on the list, including complicity in serious human rights violations, excessive reliance on thermal coal, environmental damage, and corruption.
Vale is one of Brazil’s largest private companies and until recently was the world’s top iron ore producer. The multinational giant was excluded from GPFG’s portfolio after a catastrophic dam collapse in southeastern Brazil killed at least 259 people last year. The disaster was the company’s second in five years, with a similar dam engineering failure killing 19 and flooding the Doce River with 50 million tons of toxic mud in 2015. Last year’s dam collapse, which was captured on video, released more than 10 million tons of mining waste and wrecked sections of the nearby town of Brumadinho. The incident caused a furor in Brazil after an investigation revealed that Vale had ignored warnings about safety concerns at the dam and deceived regulators about the risk of a collapse.
EDIT
https://news.mongabay.com/2020/05/norways-sovereign-wealth-fund-drops-major-brazil-miner-utility-from-its-portfolio/