SWF NOW TARGETS HUMAN RIGHTS VIOLATORS
WHEN the world’s single largest sovereign wealth fund (SWF) excludes investing in firms deemed to be doing business in countries accused of gross human rights violations, then being on its watch list could be seriously bad for business.
The SWF in question, Norway’s Government Pension Fund Global (GPFG), with current assets under management exceeding $1.275 trillion, is by far the model socially responsible such investor in the world.
Its asset allocation reach is phenomenal. At March 2021 it is invested in the equities of a staggering 9 123 companies in 73 countries in three key investment areas – equities, real estate and bonds.
When its not leading on the now issues of gender diversity on boards, countering aggressive tax planning especially by tech giants including Alphabet (Google), Apple, Facebook and Amazon, and the latest initiatives in sustainable investments, especially in a global environment beholden to the impact of the Covid-19 pandemic, its independent arms-length Council on Ethics does not shirk from its responsibility to recommend divestment from companies and markets deemed to be in violation of any of the Fund’s 10 Ethical Guidelines.
Ask South Africa’s Anglo-American and Sasol. Both were excluded from GPFG’s investment universe in 2020 for “sustainability, ethical and environmental pollution reasons” as the fund moves towards divesting entirely from fossil fuels and mineral exploration.
Today it is “serious human rights violations” that is also driving the fund’s governance strategy. This especially pertains to Myanmar, a pariah state in a brutal civil war following a military coup in February which has already claimed over a hundred lives, and China’s alleged abuses of human rights in its treatment of the Uighur population in Xinjiang province.
In early March, GPFG put Japan’s
Its independent arms-length Council on Ethics does not shirk from its responsibility
drinks giant, Kirin Holdings “under observation due to unacceptable risk that the company contributes to serious violations of individuals’ rights in situations of war or conflict, based on Kirin’s business cooperation with an organisation with ties to the military in Myanmar”. The power of GPFG shows that Kirin a few days later announced its intention to end this business co-operation.
At the same time GPFG is also looking into firms that it has invested into that could be using ethnic Uighur labour and other Muslims tied to China’s internment camp system in Xinjiang. The plight of Xinjiang’s Muslim Uighurs has gained international prominence in recent years following reports of forced labour camps.
China insists that the camps are for “re-education’ purposes to counter allegedly rising jihadist and extremist activities. In January, then US Secretary of State Mike Pompeo declared Beijing’s treatment of its Uighur population in Xinjiang as “genocide” which China dismissed as “absurd.”
Xinjiang’s quest for autonomy, if not full-fledged independence, goes back decades if not centuries. In one of my first overseas assignments in 1983, I met a frail and elderly Isa Yusuf Alptekin in Istanbul. A pan-Turkic nationalist who flirted with the right-wing National Action Party, he served in Chiang Kai Shek’s nationalist government before fleeing to Turkey following the victory of the communists and the advent of the People’s Republic of China, whose government denounced him for continuing his “Xinjiang independence activities.
GPFG’s own data however shows that in 2020 it is invested in the equities of almost 1 200 Chinese companies, including four in Xinjiang province including Xinjiang Goldwind Science and Technology Co with a market value of $264.6m!