JBSS3 Jbs Sa

By Dominic Chopping

Norges Bank Investment Management, the arm of Norway's central bank that manages the country's trillion dollar oil fund, said Tuesday that it has excluded a further four companies from the fund on ethical grounds.

Among those excluded is U.S. electricity producers PacifiCorp and Tri-State Generation and Transmission Association Inc., based on the fund's ethical criterion on the use of thermal coal.

Brazilian meat producer JBS S/A (JBSS3.BR) has been excluded due to an unacceptable risk that the company is responsible for gross corruption, and Chinese fabric producer Luthai Textile Co Ltd due to an unacceptable risk of serious or systematic human rights violations, according to a statement from NBIM.

Data from the end of 2017, the latest available, shows that the oil fund held $129 million in PacifiCorp corporate bonds and $42.8 million in Tri-State Generation and Transmission Association corporate bonds.

It had a $143.4 million investment in JBS, equal to a 1.78% stake, and $5.7 million in Luthai Textile, equal to a 0.57% stake in the company.

Further, the oil fund has placed Berkshire Hathaway Energy Co. and its subsidiary MidAmerican Energy Co. under observation based on its coal criterion. PacifiCorp is also a unit of Berkshire Hathaway Energy.

Taiwan's Nien Hsing Textile Co Ltd has, in accordance with the recommendation from the oil fund's Council on Ethics, been placed under observation due to an unacceptable risk of serious systematic human rights violations, it said.

In a final move, the executive board of NBIM has decided to follow work undertaken by India's UPL Ltd to counteract child labor as part of the fund's active ownership efforts over a period of five years.

The Norwegian Ministry of Finance has issued specific guidelines for the oil fund with criteria for observation and exclusion endorsed by Norway's parliament.

Among these criteria, the fund must not invest in mining companies and power producers that derive 30% or more of their revenue from thermal coal. Companies may also be excluded if there is an unacceptable risk of conduct that is considered grossly unethical.

Norges Bank decides on the exclusion of companies from the fund's investments, or to place them on an observation list.

There are currently 145 companies excluded from the fund and 23 under observation.

Write to Dominic Chopping at dominic.chopping@wsj.com; Twitter: @domchopping @WSJNordics

(END) Dow Jones Newswires

July 10, 2018 05:38 ET (09:38 GMT)

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