Norway's wealth fund axes 11 firms over deforestation

An Indonesian woman working at a palm oil plantation in Pelalawan, Riau province, on Sept 16, 2015.
An Indonesian woman working at a palm oil plantation in Pelalawan, Riau province, on Sept 16, 2015. PHOTO: AFP

The world's largest sovereign wealth fund last year dropped 11 companies over deforestation, including palm oil firms clearing rainforests in Indonesia, with one firm accused of using fire to the clear the land.

The decision by Norway's US$830 billion (S$1.14 trillion) government pension fund underscores the growing clout the finance sector has in pushing companies to improve their environmental practices.

Among the 11 were Genting Berhad and IJM Corp of Malaysia, and South Korea's Posco and its subsidiary Daewoo International Corp. All four were investigated and formally excluded by the fund's ethics council for causing severe environmental damage in Indonesia. The Indonesian government blamed palm oil and some pulp and paper firms for widespread clearing and burning of forests and peatlands last year, causing choking haze.

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A version of this article appeared in the print edition of The Straits Times on March 28, 2016, with the headline 'Norway's wealth fund axes 11 firms over deforestation'. Print Edition | Subscribe