Norway's Wealth fund to engage Rio Tinto and South32 on environmental concerns

Norges Bank Investment Management, Norway's sovereign fund manager, has announced that it will actively engage mining companies Rio Tinto South32 in relation to their environmental practices.

The Executive Board of the World's Largest Sovereign Wealth Fund said that it made this decision after receiving a recommendation from an independent advisor appointed by the Norwegian government, the Council on Ethics.

According to LSEG, the fund holds a stake of about 2.5% in Rio Tinto PLC and 0.13% in Rio Tinto Ltd, as well as a stake of 2.6% in South32.

The council expressed concern over the involvement of the companies in the Mineracao Rio do Norte joint venture (MRN), a major bauxite mining operation in the Amazon rainforest.

In a press release, the executive board of wealth fund announced that it had decided to work with companies to reduce environmental damage in the next five to ten years.

Mineracao Rio do Norte, a joint-venture between Glencore, who owns 45% of the company, Rio Tinto, with 22%, and South32 which holds 33%.

In an email, a spokesperson for the company said: "South32 takes note of Norges' decision to engage with South32 based on the Council on Ethics recommendation."

The spokesperson said that South32 will continue its engagement with Norges in this matter.

Separately, the fund announced that it had revoked its exclusion of German Energy Firm RWE AG and commended its move towards renewable energy.

It also announced that it would sell its shares of the Mexican oil company Petroleos Mexicanos and Israeli energy firm Paz Retail and Energy due to ethical concerns. Adwitiya Shrivastava & Sherin sunny in Bengaluru, and David Gregorio edited the report.

(source: Reuters)