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KLP rolls out 12 more ESG exclusions, adds four firms back in to universe

$80bn pension giant axes companies over links to fossil fuels, gambling, alcohol and environmental damage

Norway’s largest pension fund has axed another 12 companies from its investment universe on ESG grounds.

KLP, which runs more than $80bn, has added the following companies to its exclusion list, giving the following reasons:

  • Jardine Strategic Holdings for coal revenues

  • Jardine Matheson Holdings for coal revenues

  • Cimic Group for coal revenues

  • Japan Petroleum Exploration Co. for being involved in oil sands

  • Landing International Development for links to gambling

  • Universal Entertainment Corporation for links to gambling

  • BJ'S RESTAURANTS for links to alcohol

  • MGP INGREDIENTS for links to alcohol

  • TWIN RIVER WORLDWIDE HOLDINGS for links to gambling

  • Kambi Group for links to gambling

  • LA FRANCAISE DES JEUX SA for links to gambling

  • ElSewedy Electric for “serious environmental damage”

The companies will be ineligible for investment as of this month. 10 of the companies were divested as a result of the decision, although the pension fund only had "very small holdings" in them. It did not have holdings in the remaining two.

The exclusion of ElSewedy Electric comes after Norges Bank announced it would exclude the firm from the government pension fund – a ethical standard-setter among Norwegian investors – because of its involvement in the construction of a dam and hydroelectric plant in Tanzania that is expected to cause irreparable damage to a UNESCO natural heritage site and one of the largest conservation areas in Africa.

In addition, KLP has added four companies back into its universe after they showed improvements on ESG. Two companies, Aecom and Raytheon, were taken off the exclusion list – and invested in – because they are no longer involved in the production of key components for nuclear weapons or cluster weapons. Texwinca Holdings was readmitted after it closed down factories in which workers' rights were allegedly breached, although KLP did not allocate any capital to the company as a result of the move. Petrobras, which was blacklisted over corruption concerns, has been re-added to the universe, and invested in, after engagement from KLP and Norway's Council of Ethics led to the conclusion that “the risk of corruption has been significantly reduced”.