A worker holds a handful of palm oil seeds (AFP Photo/Sutanta Aditya)
Joachim Dagenborg & Alister Doyle for the Jakarta Globe
Norway’s $710 billion sovereign wealth fund has pulled out of 23 Asian palm oil companies after accusing them of causing deforestation, winning praise from environmentalists.
It said it sold stakes in the firms after a review of companies that have cleared forests for palm oil plantations in Malaysia and Indonesia. Palm oil is used in many foods and consumer goods such as soaps, lipstick and peanut butter.
The fund is one of the world’s biggest investors, underpinned by Norway’s oil and gas assets. Last year it expanded its investment guidelines to include deforestation as a threat to future growth.
Stakes in firms including Wilmar, KL Kepong and Golden Agri-Resources Ltd were sold during 2012, according to the fund’s annual report released on Friday.
Of these, the biggest holding had been in Singapore-listed Wilmar, worth 382 million crowns ($67.29 million).
“In the first quarter of 2012 we sold our stakes in 23 companies that by our reckoning produced palm oil unsustainably,” the fund said, without naming any firms.
Norway has given more than any other developed nation to help slow deforestation, partly as a way to avert climate change. Indonesia is home to the world’s third-largest expanse of tropical forests and is the top producer of palm oil. Malaysia is the world’s second largest producer.
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