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Norway wealth fund drops Indian group over environment concerns

Norway's sovereign wealth fund, the world's largest, has taken Indian industrial giant Bharat Heavy Electricals out of its investment portfolio due to environmental concerns, the Norwegian central bank said on Friday.

Norway wealth fund drops Indian group over environment concerns
Photo: Terje Pedersen/NTB scanpix

Bharat Heavy Electricals has been targeted because it is building a coal-fired power plant in the Sundarbans, one of the world's largest mangrove forests straddling Bangladesh and the Indian state of West Bengal.

The fund — worth an estimated 8.1 trillion kroner (852 billion euros, $934 billion) — has also placed Chinese oil giant PetroChina and Italian aerospace group Leonardo under observation over corruption allegations, said the Bank of Norway, which manages the wealth fund.

READ ALSO: Norway's wealth fund drops 52 coal companies

Some 65 senior executives at PetroChina, a listed entity of the Chinese oil giant CNPC, are being investigated on suspicion of bribery in China, Canada and Indonesia.

Leonardo is also under observation due to its involvement in several cases of alleged or proven corruption in India, South Korea, Panama and Algeria between 2009 and 2014.

The fund which has shares in some 9,000 companies around the world, must follow ethical rules which prohibit it from investing in companies that produce nuclear arms, tobacco, risk environmental damage, violate human rights, and enterprises deriving a large part of their business from coal.

More than a hundred groups, including giants like Airbus, Boeing, British American Tobacco and Wal Mart, have been blacklisted and a dozen others are under observation.

ENVIRONMENT

Norway rules out 2022 oil licences in unexplored areas

Norway will not grant new oil exploration licences in virgin or little-explored areas in 2022 under a political compromise on Monday that hands a modest  victory to opponents of fossil fuels.

Norway rules out 2022 oil licences in unexplored areas
A photo taken on August 30, 2021 shows the Petroleum Museum in Stavanger, Norway, built to show the history of Norway's oil exploration. Norway is the largest producer of hydrocarbons in Western Europe. In the face of the climate emergency, voices are being raised to abandon fossil fuels for good. Petter BERNTSEN / AFP

The Scandinavian country’s governing centre-left coalition supports continuing oil and gas activities but does not have a parliamentary majority, making it reliant on socialist MPs who prioritise green issues.

As part of a compromise on the draft 2022 budget, three parties agreed on Monday that Norway — Western Europe’s largest hydrocarbon producer — would not hold a 26th so-called “ordinary” concession round next year.

This mechanism has allowed oil companies to apply for exploration in previously unexplored areas of the Norwegian continental shelf since 1965.

But the deal does not rule out awarding oil licences in already heavily exploited areas.

Since the North Sea has been extensively explored, the agreement mainly concerns the Barents Sea in the Arctic

The oil industry was a major issue in legislative elections in September, indicating Norway’s growing difficulties in reconciling environmental concerns with exploiting energy resources.

In the 25th concession round in early 2021, only seven oil companies, including Equinor, Shell and Lundin, applied — the lowest number since at least 1978 according to local media.

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