Nordic institutional investors with combined assets of $1 trillion have penned a letter to U.S electric car manufacturer Tesla, urging the firm to cooperate with unions in light of an ongoing labor dispute in Sweden.
There are 16 signatories to the letter, which include KLP, the largest pension fund in Norway, Sweden's Folksam, and PensionDanmark.
The dispute has arisen from a decision by Tesla to not allow mechanics at seven of its Swedish repair shops to sign up to an agreement that covers rights such as minimum pay and gender equality. Since October, Tesla's operations in the region have been disrupted as sympathy actions from other trade unions that has spread to dockworkers in neighboring Denmark, Finland and Norway, according to reporting from Bloomberg.
The letter, addressed to Tesla board Chairman Robyn Denholm, argues that collective agreements are the core of the Swedish labor market and have been so for a century. The letter also claimed that around 90% of employees in Sweden work for employers with collective agreements.
Kiran Aziz, head of responsible investments at the $73.5 billion pension fund KLP, said: "We are asking Tesla for a meeting to address the current situation in Sweden where Tesla has refused to sign a collective agreement. The 'Flexicurity model' on the labor market has enabled the Nordics to thrive as one of the most prosperous and harmonious regions worldwide. "
"Tesla's attitude against the right to collective bargaining is of deep concern," she said. "Human capital management is an important issue for investors, since hiring and retaining a capable and motivated workforce contributes to the growth and value of the company."
KLP owns 0.027% of the shares in Tesla, with a market value of 2.3 billion Norwegian kroner ($211 million).
PensionDanmark, Copenhagen, has already dropped Tesla from its investment portfolio over social and labor issues such as those ongoing in Sweden. The $44 billion pension fund sold its 476 million Danish kroner ($69 million) holding in Tesla on Dec. 6, a spokesperson said.
Respondents from Swedish pension funds AP1 and AP4 both confirmed that they were not signatories to the recent letter, however they were following the labor dispute and how it develops closely. The two pension funds — with 446 billion kronor ($42.6 billion) and 486 billion kronor in assets, respectively — also stated they were engaged in an "ongoing dialogue" with Tesla via the AP-funds Council on Ethics regarding sound working conditions and respect of labor rights.
According to Bloomberg, the escalating blockade of Tesla in Sweden has extended beyond deliveries to registration plates and even trash collection at Tesla's premises. Elon Musk, CEO of Tesla, has remarked on the situation as "insane."
Tesla's weight is 1.2% in the MSCI World index, the seventh largest share overall.
Tesla has not responded to a request foer comment. Folksam confirmed they would have no further comment at this time.
In an interview with Pensions & Investments, veteran short seller Jim Chanos described Tesla as the "it girl" of the bull market, borne aloft and kept high largely by retail investors.
