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OSLO, Feb 5 (Reuters) - Norway’s $860 billion sovereign wealth fund, the world’s biggest, will put extra pressure on companies to behave more responsibly on social and environmental matters, its chief executive said on Thursday, and would target coal-users.
The fund has been accused of having too large an exposure to coal by both environmental groups and some Norwegian politicians calling for the fund to revamp its portfolio..
CEO Yngve Slyngstad told journalists at a presentation of the fund’s first annual report on responsible investments that it is systematically divesting companies delivering coal to power generation companies but that it is still exposed to those using coal for steel production.
“We like to use the word active not activist, but it does mean that we are spending more time and having more people looking into these issues,” he said of the fund that owns about 1.3 percent of all listed shares.
“This can lead to adjustments to the portfolio and decisions to divest from specific securities,” Slyngstad said.
Last year the fund divested from 49 companies because of environmental and social issues and has sold its holdings in a total of 114 companies since 2012.
“I think we have done quite well in the focus areas that we targeted: children’s rights, climate changes and water-related issues, by putting up expectation documents and giving these to the boards,” Slyngstad told Reuters after the presentation.
The fund does not invest in tobacco companies, nuclear weapons makers and some mining groups that it says cause environmental damage.
The fund aims to exercise more active ownership by simply meeting more with boards and managements, Slyngstad said.
For instance, it discussed possible acquisitions with the board of AstraZeneca, has been involved in succession planning of the management in oil and gas firm BG Group and has sent letters to coal-using companies asking them how much it will cost to divest their coal business.
It has also started publishing its voting decisions at companies’ annual general meetings. Slyngstad said the fund, which invests in about 9,100 companies, voted at more than 10,000 general meetings in 2014. (Reporting by Stine Jacobsen; Editing by Louise Ireland)