Norway Fund Extends Environment Criteria To Water Management

STOCKHOLM -- Norway's global pension fund has added good water management to the environmental criteria it uses to invest responsibly in stocks.

The fund already assesses its investment in companies on the basis of their care for the environment and weeds out certain investments for special scrutiny, occasionally resulting in their complete exclusion from the portfolio.

"The global water shortage represents a financial risk to the fund. Water is important as a factor input and factor of production for 1,100 companies in Norges Bank Investment Management's portfolio," the central bank said.

That represents about 265 billion Norwegian kroner ($43 billion) of the near $400 billion fund's investments.

"We believe that investors should receive sufficient information to be able to assess how risk related to water scarcity, regulations and higher water purification costs can affect a company's profits and the likelihood of this occurring," NBIM's Head of Governance, Anne Kvam said.

Companies which the fund has pulled investment from on the grounds that they have violated the fund's environmentally sound investment criteria include Rio Tinto (RTP) for alleged discharges at the Grasberg mine in Indonesia and Barrick Gold Corp. (ABX.T) for its alleged riverine disposal practice at the Porgera mine in Papua New Guinea.