Adani Ports is blocked by a wealth fund in Norway because of its links to violence

The fund's manager, Norges Bank Investment Management, made the announcement late on Wednesday.

Adani Ports & Special Economic Zone Ltd. has been removed from the portfolio of Norway's $1.7 trillion sovereign wealth fund due to "unacceptable" risks of the company's involvement in human rights breaches in war and conflict zones.

The fund's manager, Norges Bank Investment Management, made the announcement late on Wednesday. Due to worries that it may be aiding in the transfer of military hardware to Belarus and Russia, the investor is also banning China's Weichai Power Co. and the US-based L3Harris Technologies Inc., which creates parts for nuclear bombs.

The Oslo-based fund is advised by Norway's Council on Ethics, whose recommendations were followed late last year.

The logistics and transportation company of billionaire Gautam Adani has been "under observation" by NBIM since 2022, first because of its participation in a port facility in Myanmar. That port project was sold by the business last year. The Council on Ethics in Norway said in a different statement that it is hard to determine whether Adani still maintains connections to the division since "no information on the buyer is available."

The Council on Ethics said, "This constitutes an unacceptable danger in a situation in which highly serious norm violations are taking place."

In response to a request for comments, NBIM cited the Council on Ethics' recommendations. Requests for feedback from the three businesses impacted by the exclusions were not immediately answered.

ESG investors have historically avoided suppliers and companies in the aerospace and military industries. More recently, the Russian invasion of Ukraine and the enormous stock market gains that followed have caused some portfolio managers to reevaluate the industry. More than 1,000 ESG funds owned equities in the industry as of late last year, a roughly 25% rise since Russia's incursion. Indeed, the majority of ESG fund managers still steer clear of these equities.

NBIM had 0.79% of L3Harris, 0.24% of Adani Ports, and 0.13% of Weichai Power as of the end of 2023. Adani Ports' stock increased by as much as 2.2% in early Mumbai trade.