The news: Norway’s sovereign wealth fund, Norges Bank Investment Management, says it will actively engage with Rio Tinto and South32 over environmental issues after its board of ethics advised selling its shares in the resource companies.
The numbers: The fund is one of the largest shareholders in the publicly-listed companies, owning about 2.5% of both.
Norges Bank has about $3 trillion in funds.
The context: The fund’s board of ethics’ recommendations to exclude Rio and South32 from investment stems from the companies’ participation in the $1 billion joint venture in Mineração Rio do Norte (MRN) which operates a bauxite mine in the Amazon rainforest.
Last year, the mine received preliminary approval to extend its mining of bauxite — the raw material in aluminium — until 2042.
What they said: “The Executive Board has decided to ask Norges Bank Investment Management to engage through active ownership with the companies Rio Tinto Plc, Rio Tinto Ltd and South32 Ltd on their work to reduce serious environmental damage over a period of 5-10 years,” Norges said in a note.
“The Council on Ethics recommended excluding the companies based on the companies’ participation in the joint venture Mineração Rio do Norte (MRN), which operates a bauxite mine in the Amazon rainforest.”