OSLO, March 8 (Reuters) - 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 prodicer of palm oil. Malaysia is the world's second largest producer.
The companies deny that they are a
threat to forests.
Golden Agri's website, for instance,
says: "we aim to be the leader in sustainable palm oil production."
Wilmar and KL Kepong similarly say that they support best practices and
standards to protect the environment.
DOUBLE STANDARDS
The Rainforest Foundation
environmental group has long accused Norway of double standards by investing
billions of dollars in palm oil or soya farmers while also giving cash to
nations from Brazil to Indonesia to slow deforestation.
"We are very happy with this
development in the palm oil sector," said Nils Hermann Ranum, of Norway's
branch of the Foundation.
Still, he said that Norway should do
more to pull out of other sectors that cause deforestation, such as logging
companies, oil and gas firms, soya and meat producers.
By the Foundation's estimates,
Norway had investments totalling $13.2 billion in companies damaging
rainforests at the end of 2012, against $14.4 billion a year earlier.
"They need a more coherent policy," he said.
Norway has programmes to slow
deforestation worth $1 billion each for Brazil and Indonesia, as well as
smaller projects in nations from Guyana to Tanzania.
Many companies, including
Anglo-Dutch consumer group Unilever Plc and Swiss food group Nestle ,
have cracked down on palm oil suppliers in recent years because of worries
about deforestation.
Deforestation accounts for up to
about a fifth of greenhouse gases from human sources. Forests soak up carbon
dioxide as they grow and release it when they burn or rot.
Yngve Slyngstad, head of Norway's
fund, told Reuters that Oslo was trying to invest more in palm oil producers
whose policies did not damage forests that are home to endangered animals such
as orang-utans and absorb greenhouse gases.
"We have sold many of the small
companies and concentrated investment in larger companies who often have a
better practice," he said.
Among palm oil firms, the fund more
than quadrupled its holdings in Malaysia's Sime Darby to a value of 688.8 million crowns at the end of 2012 from 150.7 million crowns
a year earlier.