Norway's Government Pension Fund Global, Oslo, will no longer invest in rubber producer Halcyon Agri Corp. due to risks of environmental damage, confirmed a spokeswoman for Norges Bank Investment Management, which manages the sovereign wealth fund's assets.
Halcyon equities had been divested from the 8.9 trillion Norwegian kroner ($1 trillion) sovereign wealth fund's portfolio effective March 18, following a recommendation by Norway's ethics council. The divestment amounted to 5.5 million Norwegian kroner.
The ethics council concluded Halcyon has caused an environmental hazard by converting tropical forests into rubber plantations, finding that the measures the company implemented won't "almost certainly be sufficient to reduce the damage caused by plantation farming."
The ethics council was also concerned about the impact of the company's activity on a UNESCO World Heritage Site, Dja Faunal Reserve in Cameroon.
Halcyon's currently has permission to operate in the Ivory Coast, Malaysia and Cameroon in areas inhabited by diverse species, as listed by the International Union for the Conservation of Nature's Red List of Threatened Species.
“We are naturally disappointed with Norges Bank’s decision to exit their investment in Halycon Agri,” a Halcyon spokeswoman said. “We welcome any constructive feedback on our operations and will post updates as and when we have any.”