Oslo, Norway — Norway’s largest pension fund said Thursday it has divested from Saudi Aramco due to the oil giant’s lack of climate action and from 11 other Gulf companies over “human rights concerns”.
KLP, which manages over 700 billion kroner ($70 billion), said the exclusion amounted to $15 million.
The fund dropped 11 companies in the telecommunications and real estate sectors from Kuwait, Qatar, Saudi Arabia and the United Arab Emirates “over unacceptably high human rights violations’ risks”.
Saudi Aramco was blacklisted due to its ties to the Saudi state and for “contravening expectations over climate and energy transition plans”, the fund said.
“The overall rationale for these exclusions is that Gulf states remain characterized by authoritarian systems of government that restrict freedom of expression and political rights, including of critics and human rights activists,” Kiran Aziz, head of responsible investment at KLP, said in a statement.
Aziz said the telecom companies were excluded because “the development of advanced technology, including AI, reinforces the ongoing risk of systematic surveillance and censorship”.
He said reforms have “not gone far enough” in the real estate sector, where African and Asian migrant workers have faced discrimination and human rights violations.
Saudi Aramco is 90 percent owned by Saudi Arabia and was excluded primarily due to its lack of an energy transition plan, the fund said.
“The company’s climate policy and lobbying efforts reflect the dominant owner’s active opposition to the phasing out of oil and gas as a climate mitigation measure,” it said in a statement.
KLP divested from Russian companies in 2022 following Russia’s invasion of Ukraine.
In 2021, the fund excluded 16 companies with links to Israeli settlements on the West Bank. The settlements are considered to be in violation of international law. KLP held investments totaling NOK 275 million ($27.13 million) in the companies at the time of the decision.
The companies included telecom equipment giant Motorola. The fund ad said that the UN High Commissioner for Human Rights had published a list of companies with activities linked to the Israeli settlements in the occupied Palestinian territory.
“Our assessment is that there is unacceptable risk that the excluded companies contribute to violations of human rights in war and conflict situations through their affiliation with the Israeli settlements in the occupied West Bank. This is supported by the rules concerning occupation in the Hague Regulations and the fourth Geneva Convention,” senior analyst with KLP Kapitalforvaltning, Kiran Aziz, had said.