Norwegian Pension Fund KLP Blacklists #Saudi Aramco, Other Gulf Companies - Bloomberg

Norwegian Pension Fund KLP Blacklists Saudi Aramco, Other Gulf Companies - Bloomberg

Norway’s largest pensions’ manager divested $15 million from Gulf companies on concerns they may facilitate human rights violations, and decided to exclude Saudi Aramco because of climate risks.

KLP, which oversees $70 billion, blacklisted a dozen companies listed in Saudi Arabia, Qatar, the United Arab Emirates and Kuwait from its investment universe. The divestments mostly reflect an “unacceptable” risk of contributing to human rights abuses, KLP said, with Aramco targeted separately for its negative impact on the environment.

The excluded firms included companies in the real estate sector, where KLP says migrant workers from Africa and Asia have faced discrimination and human rights violations. The pension fund also targeted the telecommunications sector, where it cited the development of artificial intelligence as reinforcing the risk of surveillance and censorship in the region.

“Gulf states remain characterized by authoritarian systems of government that restrict freedom of expression and political rights, including of critics and human rights activists,” said Kiran Aziz, KLP’s head of responsible investment, in a statement.

The stocks which were blacklisted were mixed on Thursday, with some trading higher along with emerging-market peers, while others slipped. Aramco edged lower, tracking an overnight drop in oil. Foreign investors generally have a smaller exposure to Gulf markets — which comprise just over 7% of the MSCI Emerging Markets Index — due to smaller free floats and more recent inclusions to the benchmark.