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Norway wealth fund drops Indian group over environment concerns

Norway's sovereign wealth fund, the world's largest, has taken Indian industrial giant Bharat Heavy Electricals out of its investment portfolio due to environmental concerns, the Norwegian central bank said on Friday.

Published: 5 May 2017 15:37 CEST

Norway wealth fund drops Indian group over environment concerns

Photo: Terje Pedersen/NTB scanpix

Bharat Heavy Electricals has been targeted because it is building a coal-fired power plant in the Sundarbans, one of the world's largest mangrove forests straddling Bangladesh and the Indian state of West Bengal.

The fund — worth an estimated 8.1 trillion kroner (852 billion euros, $934 billion) — has also placed Chinese oil giant PetroChina and Italian aerospace group Leonardo under observation over corruption allegations, said the Bank of Norway, which manages the wealth fund.

READ ALSO: Norway's wealth fund drops 52 coal companies

Some 65 senior executives at PetroChina, a listed entity of the Chinese oil giant CNPC, are being investigated on suspicion of bribery in China, Canada and Indonesia.

Leonardo is also under observation due to its involvement in several cases of alleged or proven corruption in India, South Korea, Panama and Algeria between 2009 and 2014.

The fund which has shares in some 9,000 companies around the world, must follow ethical rules which prohibit it from investing in companies that produce nuclear arms, tobacco, risk environmental damage, violate human rights, and enterprises deriving a large part of their business from coal.

More than a hundred groups, including giants like Airbus, Boeing, British American Tobacco and Wal Mart, have been blacklisted and a dozen others are under observation.

Sweden's SSAB to build €4.5bn green steel plant in Luleå

“The transformation of Luleå is a major step on our journey to fossil-free steel production,” the company’s chief executive, Martin Lindqvist, said in a press release. “We will remove seven percent of Sweden’s carbon dioxide emissions, strengthen our competitiveness and secure jobs with the most cost-effective and sustainable sheet metal production in Europe.”

The new mini-mill, which is expected to start production at the end of 2028 and to hit full capacity in 2029, will include two electric arc furnaces, advanced secondary metallurgy, a direct strip rolling mill to produce SSABs specialty products, and a cold rolling complex to develop premium products for the transport industry.

It will be fed partly from hydrogen reduced iron ore produced at the HYBRIT joint venture in Gälliväre and partly with scrap steel. The company hopes to receive its environemntal permits by the end of 2024.

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The announcement comes just one week after SSAB revealed that it was seeking $500m in funding from the US government to develop a second HYBRIT manufacturing facility, using green hydrogen instead of fossil fuels to produce direct reduced iron and steel.

The company said it also hoped to expand capacity at SSAB’s steel mill in Montpelier, Iowa.

The two new investment announcements strengthen the company’s claim to be the global pioneer in fossil-free steel.

It produced the world’s first sponge iron made with hydrogen instead of coke at its Hybrit pilot plant in Luleå in 2021. Gälliväre was chosen that same year as the site for the world’s first industrial scale plant using the technology.

In 2023, SSAB announced it would transform its steel mill in Oxelösund to fossil-free production.

The company’s Raahe mill in Finland, which currently has new most advanced equipment, will be the last of the company’s big plants to shift away from blast furnaces.

The steel industry currently produces 7 percent of the world’s carbon dioxide emissions, and shifting to hydrogen reduced steel and closing blast furnaces will reduce Sweden’s carbon emissions by 10 per cent and Finland’s by 7 per cent.

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