Norway's wealth fund will probe shoemakers and crypto firms in 2025 for ethics
Next year, the Norwegian sovereign wealth fund will investigate the potential ethical violations of shoemakers, crypto-firms and gambling operators that the fund holds, leading it to sell its holdings.
Norway's Parliament has set ethical guidelines for the world's biggest sovereign wealth fund. It owns 1,5% of all listed shares in 8,700 companies around the globe.
The Council on Ethics of the $1.8 trillion fund investigates companies where it has invested money to make sure they are being respected. The ethics watchdog will recommend that the fund divests or places them on the public watchlist if they do not respect the law.
The document, which was sent by the council to the Finance Ministry on October 10, and seen by, stated that it would "investigate work conditions in a significant number" of shoe manufacturers next year. It did not name any.
Since decades, the working conditions in shoe factories across Asia have been a hot topic. Issues range from low wages and long hours to the right to unionize.
The document that outlines the plan for 2025 and has never been reported before states: "companies are directly responsible for the working conditions in their own operations, and gross, systemic violations of workers' rights may lead to exclusion from the fund."
In an email statement, the watchdog stated that the Council would be looking into these issues. It added that it was not possible to predict the results of the investigations.
CRITERIA
Norway's fund excludes 189 firms on ethical grounds. These include Airbus and Boeing, which produce nuclear weapons, and Glencore and RWE who produce coal or coal-based power.
The company also considers other criteria when making investment decisions, such as violations of human rights, environmental damage, corruption, or the production of tobacco and cannabis.
The fund invests into some of the largest shoe manufacturers including Nike with a 0.9% share worth $1 billion; Adidas with a stake of 3.6% worth $1.5 billion; and Puma with a 1.5% share worth $100 million.
Other investments include Deckers in which the fund holds a stake of 1.2% valued at $300 million; Asics in which its 2.7% holding is worth $310 millions; Birkenstock in which it owns 1.7% worth 170 million dollars and Crocs with a stake of 1.2% worth 100 million dollars.
Adidas announced last week that it has taken "various measures" to ensure fair and secure working conditions for its workers in its supply chains over the last 25 years. This includes conducting 1,200 factory auditors last year.
Puma has invested "a vast time and resource" to ensure that ESG topics are of a high standard for the last 20 years. This includes requiring all suppliers sign a legally binding code and actively investigating reported breaches.
Nike, Deckers Asics Birkenstock, Crocs and Birkenstock did not respond immediately to requests for comments.
CRYPTO and GAMBLING
The document details the work that the ethics watchdog already has done, and also new areas of investigation for next year.
The Council on Ethics 2025 said that it would be looking at companies in the gambling/casino and cryptocurrency industries, as there was a high risk of money laundering.
Norway's fund has invested in gambling companies Flutter Entertainment and MGM Resorts. Its 2.13% stake in Flutter Entertainment is worth $691m, while its 0.87% in MGM Resorts is worth $121m.
Coinbase, Flutter Entertainment, and MGM Resorts have not responded to our requests for comment.
As previously reported, the watchdog will continue its investigation into "several" companies that may be violating human rights on the West Bank occupied.
The Council on Ethics provides recommendations to the board, which runs the fund, of the central banking institution. Often, the bank will follow the advice of the watchdog to exclude companies.
You can also ask the management of a fund to get involved directly or put a company's behaviour on notice. The fund does not name the divestment targets until after it has sold.
The time required to divest varies from a few weeks to several months depending on the size and type of company. The fund will divest from a company gradually so that it does not alert the markets.
(source: Reuters)
