Norway Excludes India’s Adani Ports from Sovereign Wealth Fund over Ethical Concerns

Norway’s central bank, Norges Bank, which oversees the world’s largest sovereign wealth fund, has decided to exclude India’s Adani Ports & Special Economic Zone from its Government Pension Fund Global due to ethical concerns. This decision, announced on May 15, 2024, also affects two other companies: the United States L3Harris Technologies and China’s Weichai Power.

The exclusion of Adani Ports stems from what Norges Bank describes as an “unacceptable risk” of the company contributing to severe violations of individual rights in conflict situations. This move follows a period of scrutiny, as Adani Ports had been on the bank’s watchlist for potential exclusion since March 2022.

Norges Bank’s decision underscores its commitment to ethical investment standards. The central bank’s executive board makes such decisions based on recommendations from its Council on Ethics, which evaluates companies for compliance with the fund’s ethical guidelines. These guidelines include considerations of human rights, environmental sustainability, and corporate governance.

The specific ethical concerns regarding Adani Ports relate to the company’s alleged involvement in activities that could exacerbate conflicts or contribute to human rights abuses. Although the bank did not disclose detailed incidents, the reference to “situations of war or conflict” suggests serious allegations of the company’s operations adversely impacting vulnerable populations in conflict zones.

This exclusion is significant for several reasons. Firstly, it signals Norway’s stringent stance on maintaining ethical standards in its investment portfolio. The Government Pension Fund Global, valued at over $1.3 trillion, is a leading example of responsible investing, and its actions often influence global investment practices.

Adani Ports has faced various controversies over the years, including environmental concerns and disputes over land acquisition in India. The addition of human rights concerns in conflict zones further complicates its global operations. Since being placed on Norges Bank’s watchlist in March 2022, Adani Ports had been under increased scrutiny, reflecting the growing importance of ethical considerations in investment decisions.