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Feb 04, 2016

Norges divests from 73 companies and votes on 112,601 resolutions in 2015

Bank voted in line with board recommendations 92 percent of the time, annual report says

Norges Bank, which manages the world’s largest sovereign wealth fund, divested from 73 companies last year, bringing the total to 187 over the past four years, the company says in its second annual report on responsible investment.

Divestments in 2015 followed an assessment of social and environmental risk factors that form part of ongoing research into the risks associated with the companies Norges Bank invests in, the report says. Several other projects have been launched to further its research.

The report also reveals that the bank voted on 112,601 resolutions at 11,562 shareholder meetings around the world last year. Almost all (98 percent) of the resolutions were proposed by the companies themselves, while 2 percent were proposed by shareholders.

Norges Bank voted in line with the board of directors 92 percent of the time. Of the votes against the board’s recommendation, 61 percent were related to the election of directors and 15 percent were related to specific items, such as bylaw amendments, that it considered were not in shareholders’ interests or where it saw reporting as weak.

The firm also started making its voting intentions public ahead of shareholder meetings in select cases last year. It considered giving advance notice of its voting intention in 25 cases but most issues were resolved in talks with management, it says. Norges went ahead with announcing its voting intentions ahead of annual meetings at BP, Royal Dutch Shell and AES, however.

‘With holdings in more than 9,000 companies, we vote at nearly every general meeting, but we cannot have extensive or in-depth knowledge of every company in the portfolio,’ the report explains. ‘We therefore emphasize good corporate governance and the role of the board, and concentrate our ownership efforts on topics and companies where we believe there is the greatest potential to create value for the fund.’

The report explains how Norges updated its expectations over children’s rights, water management and climate change in 2015. It also discusses new expectations for how companies should manage human rights. You can download the report here. Norges new expectations on human rights can be found here