(MENAFN- AFP) Norway's gigantic sovereign wealth fund announced Monday it is divesting from four large Asian companies over the environmental damage their palm oil activities have on tropical forests.
The world's largest public investment fund managing 7.1 billion kroner(785 billion euros, $872 billion) in Norwegian wealth said its decision to exclude four groups -- including South Korean group Daewoo International -- from its portfolio was based on "an assessment of the risk of severe environmental damage" from their conversion of tropical forests to cultivate palm oil.
Daewoo and South Korean steelmaker Posco, and Malaysian groups Genting and IJM, were targeted in the divestment decision by Norway's central bank, which manages the wealth fund that owns around 1.3 percent of all stocks on global equity markets.
The fund manages its investments according to strict ethical guidelines that had previously led it to exclude around 60 companies from its holdings, including Airbus, Boeing, Safran, Philip Morris and Wal-Mart.
Those moves by the fund -- which draws investment money from Norway's huge oil revenues -- are frequently replicated by other international investors concerned about ethical perceptions of their holdings.
Daewoo fell afoul of fund managers for its 85 percent stake in an Indonesian company responsible for clearing enormous swathes of the country's tropical forest for palm oil cultivation.
At the end of 2014 the fund owned 0.91 percent of Posco worth $198 million, and 0.28 percent of Daewoo valued at $9 million.
Its 0.4 percent stake in Genting was worth around $41 million, and its 1.6 percent position in IJM was estimated at $46 million.
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